Hernandez Associate Gets Probation in Tax Evasion Scheme

The former mortgage broker to socialite Danny Hernandez was sentenced Monday to two years of probation for bilking the federal government out of almost $85,000 in taxes.

Shawn Cassidy, 35, had pleaded guilty in U.S. Federal Court in August to two counts of income tax evasion for lying on his tax forms in 1990 and 1991.

Assistant U.S. Atty. Stephen Wolfe, who prosecuted the case, called the crimes “a shame.

“Until he committed these offenses, he’d been completely law-abiding and even admirable, very hard-working,” Wolfe said.

As mortgage broker for Hernandez, of Mission Viejo, Cassidy worked out a scheme in which Hernandez understated his taxable income by hundreds of thousands of dollars.

Cassidy told the Internal Revenue Service that he paid Hernandez $257,000 in commissions for referring mortgage business to him. Hernandez backed up the claim to legitimize some of the exorbitant income he was making from stealing nearly $8 million from the Santa Fe Springs precious metals company where he worked.

Hernandez received a 71-month prison sentence in April after pleading guilty to mail fraud and money laundering. His wife, Susie Hernandez, was sentenced to 16 months for her role in the scheme.

Cassidy, of Encinitas, had faced up to 10 years in a federal prison and $500,000 in fines. Prosecutors were satisfied with his relatively light sentence, which included a $100 fine, because of his ready admission that he committed the crimes when he was confronted by IRS investigators and his agreement to cooperate in the government’s case against Hernandez, Wolfe said.

Cassidy has since made total restitution, Wolfe said, including tens of thousands of dollars in penalties and interest.