2 County Men Guilty in Tax Fraud at B-1 Subcontractors for Rockwell

Three Southern California men--including two Orange County residents--have pleaded guilty to charges that they set up a tax fraud involving phony invoices.

The fraud was carried out at two Montebello companies--Super K and J.K. Precision Machining Inc.--that were subcontractors to Rockwell International on the B-1 in the mid-1980s.

The companies’ owner--Joseph Kasparoff, 55, of Encino--wrote company checks based on bogus invoices to two Orange County residents. Kasparoff deducted the payments as business expenses on his taxes, even though the men returned the money to him.

At the same time, the government paid the two companies hundreds of thousands of dollars, based on many of the phony invoices.

“They stole the money from the government through defense fraud, then laundered the money out of the company into their own pockets, and then evaded taxes on that money,” Assistant U.S. Atty. Steven G. Madison said.

Harold Geyer, 71, of Brea pleaded guilty Tuesday to conspiracy and two counts of tax evasion for writing the phony invoices and failing to file tax returns or pay taxes for three years. Geyer worked as a messenger for Kasparoff’s companies.

Frank Calta, 40, of Orange pleaded guilty last week to conspiracy for cashing about $1 million in checks made out to fictitious third parties, then returning the money to Kasparoff. Calta was a business acquaintance of Kasparoff.

Kasparoff pleaded guilty Tuesday to conspiracy, tax evasion and knowingly filing a false tax return. He faces up to 13 years in prison and $750,000 in fines.

Geyer could be sentenced up to 15 years in jail and fined $750,000. Both are scheduled to be sentenced Jan. 8.

Calta is expected to be sentenced Dec. 11 and could receive a five-year prison sentence and $250,000 in fines.

In April, Kasparoff and Geyer were convicted on charges of conspiracy, false claims and false statements in connection with defrauding the B-1 program.

The earlier scheme was carried out in part through bogus invoices prepared by Geyer, Madison said. Calta was not charged in that case.