Washington businessman, disbarred attorney sentenced to federal prison
Businessman George Retos Jr. got himself disbarred from practicing law and spent two years in federal prison for a tax evasion case in the 1990s but still managed to persuade other people to act as figureheads for companies he set up as part of an elaborate shell game earlier this decade.
On Wednesday, Retos, 71, of East Washington, was sentenced to a year in federal prison, plus two years of probation.
He pleaded guilty last November to charges of conspiracy to commit employment tax fraud and false bankruptcy declarations in a deal with prosecutors that allowed him to “acknowledge responsibility” for conduct related to another count, wire fraud, without entering a guilty plea.
In the indictment a grand jury returned in March 2018, prosecutors said that Retos had “effectively controlled the personnel, finances and operations” of three companies – Prime Plastics Inc., Plastic Power Inc. and Branikas Investments – with the same Detroit Avenue address in Washington.
Meanwhile, two other people who weren’t charged acted as the nominal presidents to camouflage a series of financial crimes Retos committed over several years leading up to 2014.
Assistant U.S. Attorney Eric Olshan called Retos a “rare breed in this courthouse.”
“He is a white-collar recidivist,” Olshan said.
Retos was previously an attorney and represented the Washington County Authority and county Industrial Development Authority before the 1992 indictment that resulted in his conviction by a federal jury.
During his opportunity to speak, Retos stood despite assurances from U.S. District Judge Arthur Schwab that he was allowed to remain in his seat.
Retos halted, evidently to regain his composure and fight tears, within the first few sentences of his monologue, and continued doing so as he went on to tell the court he was “prepared to accept any punishment” it might impose and was “truly sorry” for his actions.
“I ask this court’s forgiveness,” he intoned near the end.
Back in the chair, he wiped his face with his hand, then calmly and clearly answered a series of boilerplate questions that Schwab asked him.
The indictment said Prime Plastics had failed to pay hundreds of thousands of dollars in federal employer and payroll taxes.
In response to efforts by the Internal Revenue Service to collect that money, Retos had the employees transferred to the previously dormant Plastic Power in 2012. Plastic Power, in turn, ostensibly “leased” these employees back to their previous employer as both companies neglected to pay taxes.
Meanwhile, Retos withdrew thousands of dollars from Plastic Power for his own use, according to court papers.
In 2012, Retos registered Plastic Power under the fictitious name Prime Plastics Inc. to hide the fact that the real company with that name – which declared bankruptcy in 2013 – was going out of business. During that process, prosecutors said Retos failed to declare thousands of dollars in transfers the company made “outside the ordinary course of business” over the prior two years.
He’d also induced full-time employees of the plastic companies to lie to the state Department of Labor and Industry so they could receive unemployment benefits while he deducted money from their paychecks. The state paid out a total of $63,000 to those employees.
Schwab described his sentencing decision as “difficult.” On the one hand, he pointed to medical problems – which went unspecified during the hearing in open court – that for which Retos needs regular care. On the other, Schwab noted Retos’ previous history and that the long series of decisions he’d made to carry out the schemes.
The sentence Schwab ultimately imposed was shorter than the guidelines, which called for 18 to 24 months. Still, it was more stringent than the house arrest that defense attorney Stephen Stallings had requested so that Retos could receive medical care and keep working as a controller for the construction company where he’s worked for the last five years.
Schwab did agree to recommend Retos do his time at the prison in Morgantown, W.Va. He is to report to authorities no later than Jan. 13.