Sacto 9-1-1
August 5, 2013
Poor Red's owners plead guilty to tax evasion, insurance fraud

By Claudia Buck

The owners of Poor Red's, a popular BBQ-and-bar fixture in El Dorado, have pled guilty to seven felony counts of tax evasion and insurance fraud, the El Dorado County District Attorney's office reports.

Michael Adams and Brenda Adams, who reached a plea agreement Friday with their attorneys, were originally accused of 30 counts of evading nearly $350,000 in state income and employee tax payments. The couple also pled guilty to one misdemeanor charge of failing to secure workers' compensation.

They'll be sentenced Dec. 4. Both were required to surrender their passports as part of their plea bargain.

The pair were arrested in April, charged with 30 counts of failing to pay nearly $350,000 in income taxes. The investigation was a joint effort by the El Dorado County District Attorney's office, the state Franchise Tax Board, the state Board of Equalization and the state Employment Development Department.

At the time of their arrest, Franchise Tax Board spokesman John Barrett said the case was an example of an "alleged underground economy," noting that the couple had apparently paid their employees in cash in order to evade taxes.

The restaurant, opened in 1948 and famous for its Golden Cadillac cocktails and BBQ plates, has remained open since the couple's arrest but is believed to be for sale.

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