Howard Owen Kieffer, a prominent businessman and an activist in the Orange County Democratic Party, was sentenced to five years in prison Monday and ordered to repay $212,724 that he swindled from the federal government by submitting trumped-up tax returns.
Kieffer, 34, a marketing consultant living in Trabuco Canyon, pleaded guilty April 10 in U.S. District Court in Los Angeles to four counts of making false claims against the government.
U.S. District Judge William J. Rea imposed the prison term in Los Angeles on Monday and ordered Kieffer to serve five years of probation after his release.
After his January indictment, Kieffer was removed from his post as an alternate on the county Democratic Central Committee and from a seat on the Board of the Associates, a Democratic Party support group, and also lost his spot on South County's 70th Assembly District Committee.
Democratic party officials said Kieffer had supervised the Laguna Hills regional office that supplied get-out-the-vote and voter-registration services for presidential nominee Michael S. Dukakis and other Democratic candidates.
Mike G. Balmages, chairman of the county Democratic Party, said that as a political worker, Kieffer was "diligent, hard-working and talented."
According to the government, Kieffer obtained legitimate W-2 forms, filled them out with salary information from two businesses and attached them to his 1983-86 tax returns. In what the prosecutor called "fine examples of creative writing," Kieffer claimed that large portions of his ample paychecks had been withheld and asked for refunds.
His refunds came without a hitch, but an informant tipped off the Internal Revenue Service that the two businesses were bogus. ICN Corp. in Los Angeles was nonexistent, and Pacific Animal Diets Corp. in Anaheim turned out to be long-vacant rooms Kieffer had rented in the early 1970s, prosecutors said.
Kieffer's attorney, James L. Waltz, said Monday that he is disappointed in the sentence and will consider appealing. He said the businesses were "legitimate for a period of time" but refused to elaborate.
Prosecution documents show that Kieffer told federal officials that the firms were real and that the salary figures he submitted were accurate, but the companies did not pay him what he was owed, so he used the government to compensate himself.
Assistant U.S. Atty. Maurice A. Leiter called that story "utter nonsense."
In a written memorandum submitted to the court for sentencing, Leiter asked for a substantial prison term for Kieffer, whose legal skirmishes date back to 1976.
"This case," he said, "represents more than a simple attempt to defraud the IRS. (Kieffer) engaged in more than five years of well-planned, well-executed fraud. Moreover, this scam was merely the centerpiece of years of crimes committed by this defendant, crimes for which (he) has never taken responsibility and for which he has never adequately been punished."
Leiter said the government's investigation revealed that Kieffer's swindling began as early as 1980 and included $53,652 in unjustified state tax refunds, but that the statute of limitations restricted federal prosecution to activities occurring in 1983 or later.
Kieffer was convicted of grand theft in 1983 for using his employer's credit card to buy himself airline tickets. In 1984, he was convicted of grand theft and forgery for illegally deeding himself a house that he used as collateral for a home loan. When the loan was foreclosed, the true owner--a widow--had to give up her home to pay the note. Kieffer was placed on probation for both offenses, Leiter said.
Kieffer was found to be in violation of his probation twice in 1985: once for using a former employer's credit card to buy furniture for himself and again for possessing 14 credit cards and illegally obtaining a cable TV hookup.
He was convicted of possessing $48,828 worth of stolen checks in 1976, but Leiter said that conviction was set aside because of Kieffer's youth.