Two Hollister residents were arrested for felony tax violations
Monday.
Jona Lona, 47, and his wife, Corrina, 42, self-surrendered to
special agents from the Franchise Tax Board (FTB) at the San Benito
County Jail for six counts of state income tax fraud and state
income tax evasion.
Two Hollister residents were arrested for felony tax violations Monday.
Jona Lona, 47, and his wife, Corrina, 42, self-surrendered to special agents from the Franchise Tax Board (FTB) at the San Benito County Jail for six counts of state income tax fraud and state income tax evasion.
Jona, a maintenance mechanic at a Watsonville-area produce company, and Corrina, a wholesale seller of pre-paid telephone cards, owe the state more than $110,000 in back taxes over a three year period between 1999 and 2001, said John Barrett, spokesman for the FTB.
Jona filed his state income tax for these three years, but failed to claim his wife’s income. He is being charged with three felony counts of state income tax fraud.
“Because they’re married they should have been claiming all the money together,” Barrett said. “So I guess he was hoping to do the right thing but he did the wrong thing.”
Corrina did not file taxes at all during the three-year period, and is being charged with three counts of state income tax evasion. Each charge carries a three-year maximum state prison term, Barrett said.
If convicted, the duo could serve up to nine years in prison each, along with having to pay restitution in the amount of $110,000, Barrett said.
“We will still come after them to collect, because it’s a legitimate bill – you owe it to us,” Barrett said. “Just because you served your time in prison, you still owe this debt over here. When you get out of prison, there’s FTB with a bill saying, ‘Hi, you owe me.'”
Most people who are arrested for tax evasion or fraud at this level usually see some prison time, he said.
If they can’t pay the $110,000 debt in full, the FTB will set up some type of monthly payment plan until the entire amount is paid, Barrett said.
Corrina was able to avoid paying taxes by being paid in cash for her phone-card sales, according to the FTB.
“When you walk into 7-Eleven and you see those pre-paid phone cards for $5 or $10, that’s what they were selling,” Barrett said. “But she would go into 7-Eleven and the owner would say ‘Here’s your $100 for a week’s worth of cards,’ and she was just pocketing the money.”
Jona was a salaried employee at the produce company, but Corrina earned $1.29 million and diverted more than $279,000 in money orders and currency away from bank accounts, Barrett said.
Customers would pay her with money orders, and instead of writing in what the money orders were for, she would write in her own name and use it to pay her car or house payments, Barrett said.
The couple purchased a $1.1 million home in Hollister, a 2000 Jaguar, 2000 BMW, 2001 GMC Sierra and a 2002 Porsche Carrera, along with two pieces of rental property in Hollister, according to the FTB.
The court will ultimately decide what will happen to these items, said District Attorney John Sarsfield.
“With tax violations… trying to figure out what happens to (the personal effects) is so complicated no one will know for some time,” Sarsfield said.
The couple surrendered under the supervision of their attorney, and were booked into the jail in lieu of $50,000 bail each. Their arraignment will not be set for at least a month, Sarsfield said.
“They’ll get searched, just like you see on TV, get photographed and all that fun stuff,” Barrett said.
The couple had been receiving notices that they needed to pay the back-taxes since 1999 and disregarding them, Barrett said.
“And phone calls and probably some knocks on the door,” he said. “And they ignored all that.”
Because the offenses are considered “white-collar” crimes, the FTB notified Jona and Corrina that they were going to be arrested.
Their surrender will have no effect on their sentencing, he said.
“A crime is a crime,” Barrett said.
The FTB is currently investigating more than 300 cases from San Diego to the Oregon border, “but we have 14 million people who file tax returns, so it’s not terribly common,” he said.
Whatever the outcome of the case, the charges don’t bode well for the couple’s fiscal fate.
“I hope it does a lot of damage to their future financial status,” Barrett said. ‘But that’s just speculation.”
Jona and Corrina Lona denied comment.
