Slatkin Associate, Girlfriend Face Tax-Evasion Indictment

Federal prosecutors announced tax-evasion charges Tuesday against former Grateful Dead road manager Ronald L. Rakow and his girlfriend in connection with a scheme to conceal Rakow’s income, much of which he earned working for convicted Ponzi scheme operator Reed Slatkin.

Assistant U.S. Atty. Michael R. Wilner said Rakow diverted $5.2 million that he received from Slatkin and other sources to his girlfriend, Denise Del Bianco, from 1998 through 2001.

At the time, the Internal Revenue Service was trying to collect $2.2 million in unpaid taxes from Rakow, according to an indictment returned last week. Del Bianco paid income tax on the funds, but the alleged diversion kept the IRS from seizing Rakow’s cash and securities outright, the indictment alleged.

Rakow “falsely made it appear to the IRS that he had only minimal income and assets with which to pay the unpaid tax,” the indictment said.

Rakow was charged with tax evasion and falsifying tax returns. Del Bianco was charged with aiding and abetting tax evasion and also with wire fraud.

Wilner said Rakow recruited investors for Slatkin and monitored some of his investments. Slatkin is serving a 14-year prison sentence after pleading guilty to a 15-year spree of fraud, conspiracy and money laundering that raised nearly $600 million from fellow Scientologists, celebrities and others.

The indictment says Rakow made $1.4 million selling his stock in Earthlink Network Inc., a company Slatkin helped found, with the profit held in Del Bianco’s brokerage accounts. Rakow earned millions of dollars more, it says, by serving as a consultant on Slatkin investment deals.

Lawyers for Rakow and Del Bianco could not be reached for comment. Wilner said the two were free on $50,000 bail each pending arraignment in in Los Angeles next week.