Adulterated-Gas Dealer Sentenced in Finance Fraud

An Anaheim Hills man, already imprisoned for selling adulterated gasoline and violating California pollution and tax laws, was sentenced Tuesday to 51 months in federal prison for bankruptcy fraud.

Gary Lazar, 49, who would have been eligible for parole from a state prison in February, will instead be transferred to a federal penitentiary to serve the additional time, under an order by U.S. District Judge Dickran Tevrizian.

Lazar pleaded guilty in December to two counts of fraud for hiding $6.6 million worth of assets during his and his former wife’s personal and corporate bankruptcy cases in 1991. His former wife, Divine Grace Lazar, faces sentencing Sept. 29.

The Lazars ran a string of 200 Southern California service stations that doctored gasoline, faked tests on leaky underground fuel tanks and failed to pay nearly $25 million in state sales, gas and cigarette taxes. The Lazars mixed gasoline with alcohol and “transmix”--a brew of kerosene, diesel and gas--apparently damaging thousands of cars that used the fuel.

The Lazars were sentenced in February 1995 to 8 1/2 years in state prison, Assistant U.S. Atty. Brent A. Whittlesey said.

In a separate federal operation aimed at bankruptcy fraud, the Lazars were among 110 people nationwide--35 in Southern California--who were indicted in February 1996.

Whittlesey said the couple transferred 29 service stations from their company through a series of European companies to a trust they allegedly controlled.

In addition, they were accused of transferring cash and other property to other names to hide their ownership.