Gas Station Owners Plead No Contest to 54 Charges : Crime: Prosecutor says couple sold tainted fuel, failed to pay $24 million in taxes, illegally dumped waste and ignored contamination from leaking tanks.

An Anaheim Hills couple who owned and operated more than 200 gas stations in Southern California pleaded no contest Monday to failing to pay $24 million in state taxes, illegally disposing of hazardous waste and selling gas that was so bad it made engines die.

Gary Lazar, 46, and his wife, Divine Grace, 40, also refused to do anything when gasoline from leaking tanks contaminated soil and ground water, and conspired to falsify tests, said Deputy Dist. Atty. Anthony G. Patchett.

“They were running a pretty big scam,” Patchett said. “They were really working the system. And they almost got away with it. They were selling bad gas. They used to get lots of complaints from people saying ‘My car is dead!’ ”

The couple, who have been in custody for nearly a year, faced up to 12 years in prison and $800 million in fines and restitution. Under the terms of a plea agreement with prosecutors, the couple now face up to eight years in prison when they are sentenced Oct. 21 in Los Angeles Superior Court on 54 criminal counts, Patchett said.

“There was a lot of evidence that they knew exactly what was going on,” Patchett said, explaining why prosecutors filed criminal charges rather than seeking remedies through the civil court system. “The evidence was just so blatant. When they learned about contamination, they just kept pumping gas and making money.”

The case is the first in which Los Angeles County prosecutors have used felony charges to penalize gas station owners for violating state standards and avoiding taxes, Patchett said. He said he plans to ask that the couple pay nearly $800 million in fines, an amount that could set a record for an independently owned business.

Attorneys for the couple could not be reached for comment late Monday.

The couple pleaded no contest to 46 counts pertaining to sales fax fraud and selling substandard gasoline, six counts of improperly disposing of hazardous wastes, one of conspiring to falsify tank tests and to other charges.

Patchett said the Lazars’ businesses were so successful that one year they made more than $160 million. They also manipulated the system to avoid paying millions in taxes on cigarette sales and gas profits, he said.

Authorities say the investigation began in 1990 when officials noted that yearly tank tests indicated none of the Lazars’ tanks had leaks. Generally, underground tanks experience some leakage.

The exact amount of restitution is to be determined after the trial of three co-defendants, including an attorney and two accountants who worked for the couple and are accused of conspiring to file false state tax returns, Patchett said.

The couple operated California Target Enterprises, Alameda Management Co. Inc., Pronto Marketing Co., P&M; Service Stations and Challenge Marketing, the prosecutor said.

The investigation of the Lazars involved auditors from the State Board of Equalization, Department of Special Taxes and Operations, Department of Food and Agriculture’s division of measurement standards, Environmental Protection Agency and Air Resources Board.