“Special agents and investigators employed by the state work to protect our state’s budget and economy by investigating the underground economy and business owners who purposely don’t report accurate taxable income.” – CSLEA President Alan Barcelona
SACRAMENTO – On June 27, 2022, California Attorney General Rob Bonta announced that Timothy Ryan O’Neal, operator of Protection Loss Prevention in Sacramento, was sentenced to two years in state prison for failing to report taxes for $979,549 in taxable income over a period of four years. As part of a plea agreement, O’Neal will be required to pay $67,489 in restitution, or the full taxes owed.
“Mr. O’Neal failed to make good on his taxes, defrauding the state of California and its citizens,” said Attorney General Bonta. “This sentence exemplifies my office’s commitment to upholding California’s laws, and to holding individuals accountable for knowingly defrauding our taxpayers. When companies cheat on their taxes, they cheat everyone out of the public services we rely upon. As the state continues to confront the economic and public health challenges that emerged during the pandemic, safeguarding our collective resources is more important than ever.”
The sentence was the result of an investigation by members of the Tax Recovery in the Underground Economy (TRUE) Task Force, including the California Franchise Tax Board, and special agents and prosecutors with the California Department of Justice.
The investigation uncovered that O’Neal operated a company called Protection Loss Prevention in the Sacramento area, offering private security services to local merchants. Between 2012 and 2015, O’Neal underreported the company’s revenue by almost $1,000,000 and underpaid income tax in the amount of $67,489. In October of 2018, O’Neal pled guilty to four felony counts of tax evasion.
The TRUE Task Force, formerly known as the Tax Recovery and Criminal Enforcement (TRaCE) Task Force, works to combat and deter financial crimes in the underground economy. The state’s underground economy is estimated to generate tens of billions of dollars in unreported revenue annually, depriving the state of billions in corporate, personal, and sales and use taxes each year. Tax evasion hurts California's economy as legitimate businesses are confronted with unfair competition and funding for public resources is lost. Moreover, employees in the underground economy may be subjected to working conditions that lack basic protections.
A copy of the complaint is available here.