Owners of the popular-but-now-defunct El Balazo chain made their initial appearance today in Oakland federal court, U.S. Attorney Melinda Haag announced. The defendants were arraigned and each is free on a $100,000 bond following a slew of charges, searches and closures.
Marino Sandoval and his wife, Nicole, own the El Balazo restaurants in San Ramon and Danville, as well as three others in the East Bay. They, along with Marino's brother Francisco "Frank" Sandoval, are charged in 20-count indictment filed on Nov. 29, 2010.
Charges include: conspiracy to commit tax evasion; tax evasion on the defendants' joint personal income tax returns for the years 2003, 2004, and 2005; failure to pay quarterly Federal Insurance Contributions Act (FICA) taxes and Federal Unemployment Tax Act (FUTA) taxes for El Balazo employees between December 2003 and April 2006; filing false U.S. Partnership income tax returns for the years 2003, 2004, and 2005; harboring illegal aliens for commercial advantage and private financial gain; knowingly hiring 10 or more unauthorized aliens over a 12-month period and submitting to the Social Security Administration false social security numbers for undocumented alien employees of the El Balazo Restaurants.
According to a release by the United States Attorney's office in conjunction with the IRS, Marino Sandoval was primarily responsible for the day-to-day activities of the restaurants in the East Bay, while Nicole Sandoval handled the catering aspect of the business, including the hiring and employment of restaurant workers and payroll for all East Bay employees.
The criminal information alleged that the defendants concealed the restaurants' daily register sales and the monthly summaries from their accountant who prepared the sales and federal tax returns for the restaurants as well as the defendants' joint personal income tax returns, then under-reported the income generated by the restaurants. The defendants are also alleged to have paid employees by payroll checks and cash and concealed the cash payments from both their accountant and the IRS.
The Sandovals are also charged with employing at least 10 unauthorized aliens over a 12-month period. Between 2002 and 2006, the defendants received "no match" letters from the Social Security Administration notifying them about discrepancies involving many of their more than 100 workers' names and Social Security numbers.
In May 2008, federal agents executed search warrants at several El Balazo restaurants and arrested 64 illegal alien workers, including some from San Ramon's Marketplace location.
On Aug. 30, 2010, Francisco Sandoval, 54, pleaded guilty to failure to pay taxes and harboring illegal aliens for financial gain. Francisco was the partner and manager of two El Balazo restaurants in San Francisco. He will be sentenced on Dec. 9.
Arlette Lee, special agent and public information officer with the IRS' criminal investigation unit, says the next step in Marino and Nicole Sandoval's case will surely be a big one.
"The next large step would either be going to trial and pleading, but I don't know what's on schedule for their next appearance," she said.
The U.S. Attorney's Office, who would have information regarding the next step of the case, was unavailable for comment.
Marino and Nicole Sandoval are next scheduled to appear before U.S. Magistrate Judge Donna M. Ryu in Oakland at 10 a.m. on Jan. 31, 2011.