Couple pleads guilty to not paying taxes on millions of income

A divorced couple has been convicted of failing to pay taxes on more than $180 million in income from their Costa Mesa business that failed to complete multimillion-dollar projects.

Richard and Jolene Engel pleaded guilty Friday to charges that they did not provide tax returns for their power plant refurbishing business, Powerplant Maintenance Specialists, Inc., prosecutors said.

Jolene Engel served as the company president.

Richard Engel, who served as the chief financial officer, faced additional charges for not filing personal tax returns, the Orange County district attorney's office said in a news release.

The Engels agreed to do business with AES Corp., a Huntington Beach power plant, in October 2000, but prosecutors said that between Oct. 4 and Dec. 31 of that year, Maintenance Specialists performed almost no work but received $36 million in payments to refurbish the plant.

Instead, the two diverted more than $24 million from the project to put a down payment on a Learjet, and buy jewelry and cars, prosecutors said.

Due to the couple's fraudulent diversion of funds, Maintenance Specialists was unable to pay workers and buy materials to perform work, although the project was never completed, according to the D.A.

Richard Engel faces up to 12 years and eight months in state prison. Jolene Engel faces up to five years and eight months in prison. They are set to be sentenced Aug. 3.

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