3 Area Men Plead Guilty to $768,966 Tax Fraud : Crime: The trio admits using the diverted funds from their Camarillo firm for such things as home improvements and purchases of boats and cars.

Three Ventura County men pleaded guilty Monday in federal court in Los Angeles to conspiracy to defraud the government out of nearly $800,000 in income taxes by illegally diverting money from their Camarillo company to their personal use.

The scheme allowed the three company executives to deposit the cash into their personal bank accounts so they could use it to buy undeveloped property in Thousand Oaks and a condominium in Palm Desert, a Justice Department attorney said.

Trevor Phillips, 53, of Thousand Oaks; Zola Lefcourt, 69, of Ventura, and Louis Garcia, 45, of Moorpark each pleaded guilty to one count of conspiracy to defraud the government by under-reporting $768,966 in taxes on individual and corporate returns.

The three men used the diverted dollars for home improvements, repaying personal loans and buying household furnishings, jewelry, boats and autos, the Justice Department said.

“This scheme was created solely to evade taxes,” said D. Douglas Metcalf, a trial attorney from the Justice Department’s tax division in Washington. “It’s a fair sum of money.”

Phillips is the chief executive of National Diversified Sales Inc. of Camarillo, a privately held firm that produces plastic products such as pipes and fittings.

Lefcourt’s attorney, Albert Galen of Los Angeles, said his client, along with the other two defendants, was one of three owners of National Diversified Sales until a few years ago when Lefcourt’s shares were bought out. Galen declined to comment on the guilty plea.

None of the three defendants could be reached for comment. Lawyers for Phillips and Garcia did not return telephone calls.

U.S. District Judge Richard A. Gadbois Jr. accepted their guilty pleas and set a sentencing date of June 1. Each defendant faces a maximum sentence of five years’ imprisonment and a fine of $250,000.

The diversion, which occurred between 1984 and 1988, was uncovered through an investigation by Internal Revenue Service special agents assigned to the agency’s criminal investigation division in Oxnard, the Justice Department statement said.

Metcalf said he expects the IRS to try, through a civil lawsuit, to collect the back taxes from the three men and the company. But he said there was no reason to believe that the company is in jeopardy.

“It’s self-defeating to shut down the income source to pay back taxes,” he said.

National Diversified Sales, situated at 3001 Mission Oaks Blvd. in Camarillo, was incorporated in 1978 and has 75 employees, according to Dun & Bradstreet, the financial reporting service. It reported sales in 1991 of $5.7 million.

Metcalf said the three men admitted that they had fraudulently diverted money from National Diversified Sales for personal gain and did not report the diverted cash on their federal income tax returns.

One of the schemes involved drawing up false invoices for fictitious materials and services, the Justice Department said. In turn, company checks were written to pay the vendors and ended up in the pockets of the three men, Metcalf said.

“The invoices were either in the names of companies or individuals that did not exist or companies that did exist but had not provided the materials or services,” the statement said.

The three men then converted the checks into cash or cashier’s checks, divided their illegal profits and deposited the cash into their personal banking accounts without paying taxes on the money.

The three also devised a scheme that billed the company for personal services, such as residential interior design work and landscaping, the Justice Department said.

Also, the three men admitted to overstating the cost of company expenses so they could take bigger corporate and individual deductions, Metcalf said.