2 Tax Auditors Face Bribery, Conspiracy, Fraud Charges : Crime: The men, who worked in Internal Revenue Service's Laguna Niguel office, are indicted by a federal grand jury in the doctoring of taxpayers' work sheets.

2 Tax Auditors Face Bribery, Conspiracy, Fraud Charges : Crime: The men, who worked in Internal Revenue Service’s Laguna Niguel office, are indicted by a federal grand jury in the doctoring of taxpayers’ work sheets.

By MARK I. PINSKY

Nov. 23, 1993 12 AM PT

TIMES STAFF WRITER

Two tax auditors who worked in the Internal Revenue Service’s office in Laguna Niguel were indicted on charges of bribery, conspiracy and fraud by a federal grand jury in Los Angeles, U.S. Attorney Terree A. Bowers announced Monday.

Peter Stein, 46, of Hawaii, who worked in Laguna Niguel from 1987 to 1990, was charged with conspiracy and receiving bribes. He no longer works for the IRS.

The second man, Adam Kutz Jr., 48, of Long Beach, was charged with making fraudulent statements and receiving bribes. Kutz has worked in Laguna Niguel since 1984, according to the indictment.

Stein is suspected of conspiring with a Gardena taxpayer and with his preparer. According to the indictment, the plan called for Stein to receive $5,000 to lower the taxpayer’s 1986 tax liability, including penalties and interest, from $161,000 to $10,000.

If convicted, Stein faces a maximum sentence of 20 years in prison, a fine of $500,000 and restitution of $150,000, according to Assistant U.S. Attorney Nathan J. Hochman.

Kutz’s indictment charges that during an undercover investigation, he received two bribes for doctoring IRS work sheets in order to reduce the tax liability of a fictitious taxpayer named “George Rockwood” in 1990 and 1991.

On the 1990 return, Kutz accepted $800 to reduce Rockwood’s tax liability from $190,264 to $8,445, according to the indictment. The next year, Kutz allegedly accepted $3,000 for lowering Rockwood’s liability from $202,757 to $7,750.

If convicted, Kutz could be sentenced to 100 years in prison and receive a fine of $2 million.

In a third, unrelated indictment, a Los Angeles IRS revenue officer was charged with making false and fraudulent statements on her sisters’ tax returns. Betina Kyle, 51, of Pasadena, was also charged with making other false statements in connection with federal seizure of her truck.

If convicted, she faces a maximum of 30 years in prison and a fine of $1.5 million, prosecutors said.