Richard Nazabal, 51, a Rancho Cucamonga, California, real estate agent, was sentenced to nine years in state prison and ordered to pay restitution to his victims as well as Franchise Tax Board. The total amount of restitution is still being determined.
Nazabal pleaded guilty to four counts of grand theft and one count of state income tax evasion.
The Franchise Tax Board’s restitution amount will include the amount of unpaid tax, penalties, interest, and the cost of the investigation.
According to court documents, between 2006 – 2008, Nazabal fraudulently obtained more than $2.4 million from investors and through a personal home loan. Nazabal promised his victims he would invest the funds and purchase fixer-upper homes and then re-sell them at a profit. Instead Nazabal used the money for personal gain and never purchased the homes. In addition, Nazabal failed to claim the illegal income on his 2007 state income tax return. All income is taxable including income from illegal sources.
The failure to file state income tax returns is part of the $6.5 billion tax gap California faces each year. The tax gap is defined as the difference between the tax that is due and the tax that is paid.
The sentence was announced by the Franchise Tax Board and was handed down Tuesday, September 22, in Department S19 of the San Bernardino Superior Courthouse. San Bernardino County Deputy District Attorney Larry Roberts prosecuted the case. This was a joint investigation between the San Bernardino County Real Estate Fraud Prosecution Unit and FTB.