$250,000 Bail Frees Fraud Case Suspect

A 42-year-old Bonita man--indicted by a federal grand jury on 23 counts of tax evasion, mail fraud, false claims and conspiracy to defraud the government--pleaded not guilty Thursday and was released on $250,000 bond.

Curtis Jerome Corn was charged in the indictment with removing fuel-oil products from Navy ship fuel tanks that his firms had contracted to clean, then selling the oil to San Diego and Long Beach firms and covering up the profits of the sales with false invoices and billings among his three firms.

Corn also is charged with evading about $1.2 million in federal personal and corporate income taxes and with overbilling the Navy for cleaning work on the ships.

Corn is the former owner of Allied Tank Cleaning Inc. in National City and Trans Ambient Corp. and is accused of being a secret 50% owner of Commercial Cleaning Corp.

The indictment alleges that Corn committed mail fraud by writing a series of letters to U.S. congressmen demanding their assistance in collecting funds he claimed the Navy owed his firm.

To avoid paying federal taxes, Corn accepted cash payments from representatives of an oil products firm, the indictment said, and the payments were concealed in brown paper bags and were delivered at meetings in restaurants and parking lots in San Diego and Orange counties.

Asst. U.S. Atty. Judith Hayes said the crimes occurred during a five-year period starting in 1979. The indictment, which was handed down by the grand jury Nov. 7, remained sealed until Thursday when Corn appeared before U.S. Magistrate Edward Infante to enter a not guilty plea.

The indictment marks the end of a 2 1/2-year investigation conducted jointly by the Internal Revenue Service, FBI, the Naval Investigative Service and the Naval Audit Service, Hayes said. Corn, who has since disposed of his company interests, listed more than $25 million in property holdings and $6.6 million in outstanding debt in a bankruptcy filing.