Grower’s Tax Settlement a Record for U.S. : Courts: Imperial Valley’s Mario Saikhon must pay $23 million in back taxes, fines in case involving an El Cajon IRS agent and his son.

Mario Saikhon, a prominent Imperial County grower, pleaded guilty Tuesday to seven felony tax and bribery charges and agreed to pay $23 million in back taxes and fines, the largest settlement of an individual’s criminal tax case in U.S. history, prosecutors said.

Under a plea bargain struck Tuesday in San Diego federal court, prosecutors agreed to recommend that Saikhon, accused of giving more than $600,000 in bribes to an Internal Revenue Service agent to evade more than $10 million in taxes, serve no more than 6 1/2 years in prison. The agent--and his son, a tax preparer--already have pleaded guilty, and are in prison.

Saikhon had been indicted on 22 felony counts that could have brought up to 102 years in prison. His case involved the largest bribe in IRS annals, which he paid to ensure that his returns from 1981 to 1990--which were littered with bookkeeping irregularities--were not examined by honest auditors, prosecutors said.

The case, prosecutors said, makes Leona Helmsley’s crimes pale in comparison. The New York hotel queen, now serving four years in federal prison, was convicted of evading $1.7 million in taxes. She also was hit for about $8 million in fines. Her total payment to the government was $9.7 million.

“I think the ($23 million) will hurt,” said Assistant U.S. Atty. Phillip L. B. Halpern, the lead prosecutor in the Saikhon case. But, Halpern added, “The six years he’ll spend in jail will cost him more than he’s going to pay.”

Saikhon, 58, of El Centro, whose net worth has previously been put at $100 million, declined to comment Tuesday on the case. He remains free on $5-million bail pending sentencing Sept. 21 before Senior U.S. District Judge Gordon Thompson Jr.

Saikhon runs one of the largest farming operations in Southern California. From 1985 to 1990, according to the indictment, his vegetable fields--lettuce, cantaloupe and a variety of other crops--grossed more than $130 million.

He also has extensive real estate holdings, including shorefront properties in La Jolla, a house in El Centro and condominiums in Santa Barbara and Manhattan, Halpern said.

Saikhon was indicted April 14, in a move calculated to generate headlines on the annual tax filing deadline, on charges that had been hinted at for months.

Last year, in connection with what prosecutors called a complex scheme by Saikhon to evade taxes during the 1980s, the former IRS agent and his son pleaded guilty in San Diego federal court to felony charges.

Robert Morales Sr., 62, a 30-year IRS employee, pleaded guilty to two felony counts and was sentenced to 12 years in prison. Robert Morales Jr., 28, who also pleaded guilty to two felony counts, was sentenced to 41 months in prison. Both men are from El Cajon.

A few months after their cases wrapped up, prosecutors moved against Saikhon in a 22-count indictment alleging that the elder Morales audited more than 20 of Saikhon’s personal and corporate tax returns in exchange for $647,518 in bribes.

Morales Sr. covered up the tax records of cash paid to “ghost” employees, diverted to offshore banks or funneled to bogus firms set up by Morales Jr., according to the indictment.

Meanwhile, the indictment said, Saikhon claimed millions of dollars of false deductions, for personal expenses that were recorded on his books as legitimate business costs.

IRS investigators became suspicious of Morales Sr. after he was seen with large sums of cash and began making $10,000 and $25,000 loans to friends, since IRS agents earn only a moderate salary, Halpern said. Eventually, Halpern said, the probe led to Saikhon and to the “veritable cornucopia” of methods Saikhon used to evade taxes.

The indictment alleged that Saikhon owed more than $10 million in back taxes on $30 million in income. With penalties and late fees, that $10 million skyrocketed to more than $20 million, prosecutors said.

Under the plea bargain, Saikhon pleaded guilty to one count of conspiracy, one count of bribing a public official and five counts of tax evasion. The tax counts covered the years 1985 through 1989. Prosecutors agreed to dismiss the other 15 counts.

The deal calls for Saikhon to pay $21,815,903.67 in back taxes and interest, due in one check on Sept. 1. It calls for him to pay an added $1.25 million in fines, due by Oct. 21.

There have been several criminal tax cases against corporations that have settled for more money, Halpern said. But Saikhon’s case marks the largest settlement against one person in a criminal tax case, he said.

The seven guilty pleas could bring Saikhon up to 45 years behind bars, but prosecutors, who were spared the expense of a trial, agreed to urge only 6 1/2 months in prison.

Thompson is free to accept or reject that recommendation. The judge also may impose a fine of up to $2.98 million under the law.