El Dorado County District Attorney Vern Pierson Announces the Sentencing of Poor Red's Owners Michael and Brenda Adams for Insurance Fraud & Tax Evasion
May 12, 2014
El Dorado County District Attorney Vern Pierson announced today the sentencing on Friday May 9, 2014 of Michael Adams and Brenda Adams, the owners of Poor Reds in Diamond Springs, who failed to report $1,320,400 in taxes and committed insurance fraud.
Defendant Michael Adams was sentenced to 6 years 8 months in state prison, and ordered to pay $629,818 as restitution for the unpaid taxes and investigation costs. Defendant Brenda Adams was sentenced to a year in county jail, and also ordered to pay $629,818 as restitution for the unpaid taxes and investigation costs. The length of time from plea to sentencing was much longer than had been anticipated, but necessary in order to attempt to obtain transfer of ownership of Poor Reds. The sentence was the result of guilty pleas to 8 felony counts, including insurance fraud, tax evasion and an
admission of an aggravated white collar crime enhancement.
“White collar crime is not a victimless crime. The ripple effects created by those who commit fraud, impact not only the company or employees who were scammed, but also have a devastating impact on business and society by creating unfair competition and raising prices and costs for everyone” said District Attorney Vern Pierson. This case was textbook example of multi-agency collaboration and joint investigation by the California Board of Equalizations (BOE), Employment Development Department (EDD) Franchise Tax Board (FTB), Department of Insurance (DOI), and investigators from the El Dorado County District Attorney’s Office.