News

Judge rules against restaurateur Russell Deutsch in tax-evasion case

A San Mateo County judge on May 26 denied a motion by attorneys defending Portola Valley resident and restaurateur Russell Deutsch to suppress as evidence a discovery by investigators of over $600,000 in cash in Mr. Deutsch's house.

The investigators from the Board of Equalization, the agency that collects taxes in California, searched Mr. Deutsch's house after prosecutors accused him of not turning over to the state $950,628 in sales tax revenues over a period of eight years.

A jury trial is set for Monday, June 13.

The search warrant "didn't say they wanted to search for money," Christian Picone, Mr. Deutsch's defense attorney, told the Almanac. "The (department) did not identify cash as one of the items they wanted to search for."

The warrant did specify a search for records, and the investigators confiscated computers and paper records, Mr. Picone said.

District Attorney Steve Wagstaffe describes Mr. Deutsch as the CEO, CFO, director and agent for a corporation that does business as Old Port Lobster Shack, Lobster Shack and Portola Valley Lobster Shack.

Mr. Deutsch has pleaded not guilty to all charges, prosecutors said.

He has been out of custody on a bail of $290,000.

Mr. Picone has taken issue with the figure of $600,000 in cash alleged by prosecutors. After the search of Mr. Deutsch's home and the discovery of the cash there, the Board of Equalization gave Mr. Deutsch a receipt for $493,457.83, Mr. Picone said.

Two days later, Mr. Picone said, the board gave Mr. Deutsch a revised receipt for $488,367.83, a difference of $5,000.

"There's nothing illegal about having cash," Mr. Picone said. "I'm not aware of any allegation that these funds were unreported income."

Comments

Like this comment
Posted by Eater of the Lobster
a resident of Portola Valley: other
on May 27, 2016 at 12:57 pm

Brazen!


Like this comment
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on May 27, 2016 at 2:28 pm

$950,000 in sales tax revenues - that's a heck of a lot of lobsters.


Like this comment
Posted by SteveC
a resident of Menlo Park: Downtown
on May 27, 2016 at 3:11 pm

SteveC is a registered user.

something smells fishy.


Like this comment
Posted by Stop the Trolls
a resident of another community
on May 27, 2016 at 3:16 pm

The fish always rots from the head down...


1 person likes this
Posted by Restaurants
a resident of Portola Valley: Central Portola Valley
on May 27, 2016 at 3:50 pm

It's very hard to make a decent profit running a restaurant without paying huge taxes as well. I don't understand how they were able to seize this man's cash; at that time, he had not been found guilty of tax evasion. It's a bit scary that with a warrant anything can be seized whether or not it's on the warrant.

Yes, he should be paying his taxes, but then so too should all the big corporations and very wealthy who find legal or quasi-legal ways to avoid taxes. When some people can escape taxes without a problem, it becomes easier for others to think they are entitled to escape taxes too.

My immediate concern is for all his employees if his businesses go under.


Like this comment
Posted by Stop the Trolls
a resident of another community
on May 27, 2016 at 4:06 pm

@Restaurants: [Portion removed; please don't state the "facts" of anyone's alleged crimes because accusations are not facts. The court will determine those.]
And just because others evade paying taxes does not get Deutsch off the hook.


5 people like this
Posted by SteveC
a resident of Menlo Park: Downtown
on May 28, 2016 at 6:51 am

SteveC is a registered user.

Case of others doing it so It is ok for me?


1 person likes this
Posted by mkeenly
a resident of Menlo Park: Allied Arts/Stanford Park
on May 29, 2016 at 12:04 pm

mkeenly is a registered user.

Why would someone keep $600K at home when banks are available and much safer?


Like this comment
Posted by Menlo Voter.
a resident of Menlo Park: other
on May 29, 2016 at 12:12 pm

Menlo Voter. is a registered user.

"Why would someone keep $600K at home when banks are available and much safer?"

If one is trying to hide ill gotten gains the worst place to put it is a bank. Banks have numerous reporting requirements to the government that law enforcement or the IRS could easily use to locate that money.


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