Ex-Chief of Oak Industries Indicted on Tax Charges
Former Oak Industries Chairman Everitt A. Carter filed false tax returns for 1981 and 1982 that understated his income by nearly $157,000, according to a federal grand jury indictment unsealed Thursday in U.S. District Court.
Carter, who served briefly as chairman of the San Diego Crime Commission shortly after its formation in 1984, surrendered Thursday morning to U.S. Magistrate Barry Ted Moskowitz. Carter, who was released after posting a $50,000 bond, faces a maximum penalty of six years and a $105,000 fine.
The former Oak executive failed to report $145,000 in income in the form of construction and landscaping work completed at his Puterbaugh Street house in Mission Hills, according to the indictment. Oak and other companies that were doing business with Oak paid for the work done at the private residence, according to the indictment.
In a related case last April, Spring Valley landscaper Victor Schard was indicted for making false statements during an Internal Revenue Service investigation into landscaping done at the Carter home.
Oak, Carter’s employer, faces no criminal liability in the tax-related indictment against Carter, according to Assistant U.S. Atty. Charles F. Gorder Jr.
According to the indictment unsealed Thursday, Carter also received $11,992.32 in unreported income from the importation of teak into the United States. That money was secreted in a Hong Kong bank account, according to the indictment.
The former Oak executive owes $74,300 in taxes for 1981 and $8,300 in taxes for 1982, according to the IRS.
Carter, who Thursday identified himself in court as a Utah resident, was previously the central figure in a lengthy investigation of Oak by the Securities and Exchange Commission.
That investigation concluded that Oak, under Carter’s stewardship, defrauded shareholders by lying in its financial statements. It also alleged that Oak’s corporate funds were improperly used to buy condominiums, sports cars and a horse for company executives.
After that investigation, the team of Oak managers that took over the Rancho Bernardo company after Carter’s resignation in late 1984 signed a consent decree that prohibited the company from violating a number of securities laws.
A class-action lawsuit that ran almost in tandem with the SEC investigation was concluded in May, 1986, when Oak and its insurance company agreed to pay $33 million to disgruntled shareholders who alleged that Oak executives fraudulently inflated the company’s stock.
Oak, formerly a high-flying media company from Crystal Lake, Ill., moved to San Diego in 1979 and occupied a lavish Spanish-style corporate headquarters in Rancho Bernardo. Oak’s fortunes plummeted, however, and the company generated $300 million in losses in 1981-85.
By early 1985, Oak had decided to sell the building for $15 million. Oak later reduced the price to $10 million and the building was sold late last month to a San Diego-based developer for an unspecified amount.
Since Carter’s voluntary resignation in late 1984, Oak has been guided by former Wickes Co. Chairman E.L. McNeely, who became Oak’s chairman in early 1985.
