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Restaurateur and Portola Valley resident Russell Howard Deutsch, who owns several restaurants, including two in Ladera (Old Port Lobster Shack and Rusty’s Roadside Grill), has pleaded not guilty to sales tax evasion charges. San Mateo County prosecutors say he did not turn over to the state $950,628 in sales tax revenues over a period of eight years.
Mr. Deutsch, 57, was charged on March 22 and booked into the county jail. On March 25 Mr. Deutsch appeared in court with his wife and was released from custody on $290,000 bail after Judge Stephanie Garratt concluded that the money he used to post bail — typically 10 percent of the total — was from a legitimate source, prosecutors said. For collateral, the couple offered real estate, prosecutors said.
Prosecutors say that investigators found $586,809 in cash at Mr. Deutsch’s home.
Christian Picone, Mr. Deutsch’s attorney, takes issue with the amount of cash found. After a search of Mr. Deutsch’s home and the discovery of the cash there, the Board of Equalization, the agency that collects taxes in California, gave Mr. Deutsch a receipt for $488,367, Mr. Picone said.
The board used a bill-counting machine and counted Mr. Deutsch’s money at least twice, Mr. Picone said. He said he did not know the denominations of the bills.
Asked to comment on the discrepancies in the reported amounts of cash, District Attorney Steve Wagstaffe said in an email that Board of Equalization investigators found $586,809, but limited the amount they seized “to the amount known at that time to be the loss to the state by the criminal conduct.”
“There’s nothing illegal about having cash,” Mr. Picone said. “I’m not aware of any allegation that these funds were unreported income.”
Mr. Deutsch’s next court appearance is set for Wednesday, March 30, for a conference, and then Monday, April 4, for a preliminary hearing, prosecutors said.
Mr. Deutsch opened the Old Port Lobster Shack restaurant in Redwood City in 2006, and subsequently opened restaurants in Ladera (in 2011), Napa and San Jose.
Redevelopment forced him out of Redwood City — he closed the restaurant in October 2015 — but there were plans to relocate to Los Altos this year.
In November 2015 in Ladera, a few doors down from the Old Port Lobster Shack, Mr. Deutsch opened Rusty’s Roadside Grill, a burger and pizza restaurant.
Asked about effects the tax evasion charges may have on Mr. Deutsch’s restaurant business, Mr. Picone said he was “not aware of there being any impact at this time.”
Peninsula Foodist blogger Elena Kadvany contributed to this story.
I knew something was shady with him. Used to eat at his restaurant, Rack and Roll in Redwood City. Started off ok, then bad service and food.
Bad attitudes from help, and no manager around. I hope he has to pay back all taxes and big fine!
Crappy Lobster Rolls and he’s a criminal douchebag. Throw the book at him
Be kind in your comments. People can make poor choices, but still have family members who can read your unkind words.
I echo PV Resident’s comments and would also add “innocent until proven guilty” should come into play here. Let’s not pile on in this situation.
taxpayer:
was there a conviction none of has heard of? I suggest you study some constitutional law before you pull out the noose. Jeese.
Didn’t someone once say, “He who is without sin among you, let him be the first to throw a stone….?”
Don’t judge this member of our community, who has given a lot to us, until he has his day in court.
People, don’t be so cruel and unforgiving.
“States do not prosecute on theories, they prosecute on evidence.”
And we still have a constitution that says we are presumed innocent until proven otherwise. Knowing it and proving it are two different things.
TaxCloud –
These are ALLEGATIONS and Mr. Deutsch has been convicted of nothing, at least not yet. You may want to look up the word “allegation” in your dictionary. Even you said “it appears Mr. Deutsch…”
Yes, while it may look bad, the accused remains innocent under our justice system. It’s there for your protection, too.
I think a lot of these defensive comments are made by his own family and relatives. I will not make any negative comments but I am very familiar with this case and will say that the case about tax evasion is not even half of all the illegal practices. There are far more violations that will be revealed at its own time and pace. Be patient and follow.
Lan:
I am not a family member. I’m just someone that believes in our constitution and laws. If he’s as guilty as you say he is, then he’ll be convicted. Then I hope they throw the book at him. Until that time, he’s presumed not guilty.