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IRS: East Washington tax evader Retos gambled, hid income, assets

By Brian Bowling and Jason Cato
Friday, June 28, 2013, 12:01 a.m.
 

The Internal Revenue Service says in federal court documents that an East Washington businessman gambled away money that he should have used to pay his taxes, but a chance he took in bankruptcy court may be the reason federal agents searched his home and business on Wednesday.

George Retos Jr., 65, agreed in August 2010 to pay about $1.04 million in back taxes to settle a 2009 lawsuit by the IRS.

But instead of paying the judgment, Retos sued the IRS in February 2012 in bankruptcy court claiming that he should not have to pay the money because the agency waited more than three years to come after the taxes.

The IRS said in its response that the three-year limit does not apply when the taxpayer knowingly evaded paying taxes by failing to pay his estimated taxes, failing to file returns, “spending large amounts of money on activities such as gambling and stock trading instead of paying his tax liabilities, and concealing his income and assets.”

As the case proceeded, the IRS demanded Retos turn over information on his bank and credit accounts and subpoenaed several casinos.

When Retos complained in court documents that the IRS was seeking too much information, the government responded Nov. 19 by saying it wanted to know if he had “dealt in cash, used nominees or alter egos to shield assets, fraudulently conveyed assets, lived a lavish lifestyle and gambled” to avoid paying the judgment.

A month later, Retos dropped his lawsuit.

U.S. Attorney David Hickton confirmed that FBI and IRS agents executed search warrants at the addresses matching Retos' house and his business, Prime Plastics Inc., as part of “an ongoing federal investigation,” but he declined to comment further.

Retos and Donald R. Calaiaro, the lawyer representing him and his company in the bankruptcy cases, could not be reached for comment. Steven L. Sablowsky, the lawyer who defended Retos in the original 2009 lawsuit, could not be reached for comment.

Prime Plastics declared voluntary bankruptcy in February.

Retos used to be an attorney. He surrendered his law license after a federal jury convicted him in 1993 of several counts of tax evasion, making a false credit application, mail fraud and interstate transportation of stolen property.

The judge sentenced Retos to two years and three months in prison. He finished the sentence in December 1996, according to court and Bureau of Prison records.

Washington County civil court records show Retos has been named in 120 cases since 1984. He filed 10 of those.

Most are part of a series of lawsuits seeking business collections and liens for unpaid taxes, filed by taxing bodies such as the United States, Pennsylvania, Washington County, Washington School District and East Washington.

In March, Washington County President Judge Debbie O'Dell Seneca signed a judgment that ordered Retos to pay nearly $90,000 to Dolores B. Calkusic of Fairmont, W.Va.

Calkusic sued Retos in November 2012, claiming she loaned him $60,000, which was not repaid, and entrusted him with $27,500 in proceeds from B.F. Goodrich Co. to reinvest in United Technologies Corp. stock. Retos did not purchase the stock, the lawsuit stated.

Bankruptcy records show that Retos owes Calkusic $87,539.39.

Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or bbowling@tribweb.com. Jason Cato is a staff writer for Trib Total Media. He can be reached at 412-320-7936 or jcato@tribweb.com.

 

 
 


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