The father and son owners of Montecito Motors are headed to state prison and will have to pay millions of dollars in restitution and back taxes after pleading no contest Thursday afternoon to dozens of felony charges for grand theft and tax evasion.
Chester Lee Taylor, 72, and his son, Chester Adam Taylor, 41, were accused of scamming about $1.2 million from more than two dozen victims, and falsifying income- and sales-tax documents for at least seven years at the now-defunct business, which formerly operated on the 500 block of Chapala Street.
The pair entered their pleas, made under an agreement with prosecutors, in front of Santa Barbara County Superior Court Judge Clifford Anderson.
They were immediately taken into custody by Sheriff’s Department bailiffs. The men will be held in the County Jail until their sentencing and restitution hearing scheduled for June 21, after which they’ll be transferred to state prison.
The 27 named victims will be allowed to make statements at the hearing in front of the judge and defendants.
The father-son team were accused of conspiring to commit grand theft, and the investigation showed they defrauded customers and filed false tax forms for years, according to the felony criminal complaint.
A restitution and sentencing hearing is scheduled for June 21 to determine how much money the two men are ordered to pay the victims, although it’s possible they’ll never pay it, Senior Deputy District Attorney Brian Cota said.
The money was spent on houses that were foreclosed on and maintaining a certain lifestyle, so there weren’t assets to take for restitution, he added.
The orders to pay will remain in place forever, Cota said, so if the defendants start working once they’re released from prison, they can begin paying it off.
Chester Lee Taylor will serve 13 years in state prison under his plea deal and was ordered to pay about $98,000 restitution to the California Franchise Tax Board for unpaid taxes, reimbursing the investigation and penalties, Cota said.
He pleaded no contest to 22 felonies and had seven counts dismissed.
Because Chester Adam Taylor is the owner of Montecito Motors, he is responsible for the misreported business documents, Cota said. He will serve 11 years in state prison and was ordered to pay $2.28 million for unpaid business sales tax, $2.9 million for unpaid business income tax, about $103,000 for unpaid personal income taxes, and investigation costs.
He pleaded no contest to 24 felonies and had 14 counts dismissed as part of the plea deal.
A no-contest plea is not an admission of guilt, but is treated the same as a conviction or guilty plea for purposes of punishment.
From 1998 to 2010, Montecito Motors was collecting sales tax but grossly underpaid it to the Board of Equalization, Cota said.
Both men admitted an enhancement of aggravated white-collar crime, since their related felonies totaled more than $500,000 taken, and are ineligible to serve their sentences in County Jail. The dismissed counts were mostly lower-level misdemeanors or additional tax evasion counts, but the unpaid taxes are still due to the Franchise Tax Board, Cota said.
Jennifer Taylor, 66, the elder Taylor’s wife, and daughter Sarah Taylor Swing pleaded guilty to misdemeanor tax evasion, and were ordered to pay restitution, interest and fines.
They weren’t the focus of the investigation, but Jennifer Taylor was “on the hook” for filing a joint tax return and Swing received checks from Montecito Motors that she didn’t claim as income, Cota said.
— Noozhawk staff writer Giana Magnoli can be reached at gmagnoli@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.