New Trouble Looms for Former Supervisor

A Superior Court judge Tuesday terminated a portion of former county Supervisor Pete Schabarum’s probation for felony tax evasion, but the football-star-turned-politician now must confront a new attempt by state authorities to levy a monetary penalty for “fraudulent” nonpayment.

Judge Charles Horan determined that Schabarum, 68, who in June pleaded no contest to three counts of felony tax evasion, has successfully completed the terms of his supervised probation, including 250 hours of community service.

Schabarum, who suffers from a degenerative eye disease, performed his community service at the Braille Institute and the Boys and Girls Club of El Monte.

The former supervisor will remain on unsupervised probation for six months.

The arrangements are part of a plea bargain that allowed him to escape prosecution on charges he paid for exotic vacations with nearly $50,000 embezzled from a nonprofit political foundation he set up and controlled.

Under the agreement, Horan sentenced Schabarum to three years of probation and 250 hours of community service, while ordering him to pay more than $65,000 in restitution, back taxes on unreported income and penalties.

But the state Franchise Tax Board now says Schabarum owes more than $7,000 in additional penalties and assessments--on top of the $9,322.50 he has paid.

Even worse, said Schabarum’s lawyer, John Barnett, the tax collectors now characterize the new assessment as a “fraud penalty.”

A representative of the tax board was in Horan’s court when the plea bargain was approved, and said then that the agency would abide by the deal, which included Schabarum’s stipulation that he engaged in no willful criminal misconduct.

Tuesday, the judge said the tax board’s apparent about-face “has an aroma to it.”

Barnett was more blunt: “They’re trying to welsh on the deal,” he said outside of court, as Schabarum worked his jaw in anger next to him. “It’s extraordinary, really. Government agencies should be bound by their word.”

Jim Shepherd, a spokesman for the tax board, said the agency is looking into Schabarum’s complaints.

Schabarum was ordered to pay more than $7,000 in unpaid back taxes for the years 1992, 1993 and 1994. In addition, tax board representative Edward Wilson told Horan that his agency would impose a 25% penalty plus interest, Barnett contends in court papers.

So Schabarum wrote a check to the tax board for $9,322.50.

But then, Schabarum said Tuesday, he got a letter last month saying that the tax board had decided to levy a 75% “fraudulent” assessment, not 25%, which is the amount imposed on those deemed to have made accidental mistakes.

Deputy Dist. Atty. Thomas Kragg and Horan agreed Tuesday that Barnett’s recollection seemed accurate, and that Wilson had agreed to a 25% penalty.

The judge said that by his understanding of the plea bargain, he would accept Schabarum’s payments to date as satisfying the conditions of his probation. He said Schabarum must deal with the tax board regarding the ongoing dispute.