Retired auto dealer James Pflueger acquitted of tax fraud charge - Hawaii News Now - KGMB and KHNL

Retired auto dealer James Pflueger acquitted of tax fraud charges

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HONOLULU (HawaiiNewsNow) -

A federal judge acquitted retired auto dealer James Pflueger on four counts of tax fraud on Wednesday.

U.S. District Court Judge Leslie Kobayashi said the government simply failed to prove its case and was unable to show that Pflueger intentionally conspired to conceal profits he earned on a San Diego land deal from the IRS.

"I think the court got it exactly right in this case. It was not a stretch. The evidence was overwhelming in our favor," said Steven Toscher, Pflueger's attorney.

Pflueger was visibly relieved after hearing today's verdict.

"You know what, I'm overwhelmed, with everything. Thank you," he said. "Happy day. Happy day."

The 87-year-old Pflueger was indicted in 2010 for attempting to conceal millions of dollars in profits from the San Diego land deal.

He also was accused of illegally running his personal expenses through parent of the Pflueger auto dealerships here in Hawaii.

Prosecutors say Pflueger was forced to sell the San Diego land to pay for mounting costs associated with the 2006 collapse of the Kaloko Dam on Kauai. The dam breach killed seven people and caused millions of dollars in damage.

Much of the federal government's case relied on the testimony of Pflueger's Los Angeles tax consultant, Dennis Duban but the court appeared to have problems with Duban's testimony.

A self-dubbed tax adviser to the stars, Duban pleaded guilty to federal tax fraud charges in October.

"We felt a number of things he said were not credible," said Toscher.

Today's verdict comes after Pflueger's son Alan pleaded guilty last May to filing a false 2005 tax return.

Pflueger is still awaiting trial on manslaughter charges in the deaths of seven people that were swept from their homes on Kauai's North Shore after the Ka Loko Dam broke on his property. That case will likely go to trial later this year.

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