By On the occasion of our 20th anniversary
By Gustavo Arellano
By R. Scott Moxley
By Alfonso Delgado
By Courtney Hamilton
By Joel Beers
By Peter Maguire
By Charles Lam
Illustration by Bob AulIn 1998, George L. Argyros—a Republican who says he hates "frivolous lawsuits"—sued Orange County. On Feb. 28, 2000, his case went to court. It was the county's most sensational two-day trial you've never heard about—because it has never been reported until now.
The case began in 1996, when the county sent Argyros a tax bill for the $12 million Canadair Challenger that shuttled him around the world. The bill was for a whopping $124,957.98, but it included the requisite warning at the bottom: "There will be a $30 fee for each check returned by the bank for any reason."
Argyros paid and then sued. At trial, his attorneys said he should get his $125,000 back with interest. They told the court the plane didn't belong to Argyros but to a company called Sunbird Aviation. They said the plane was part of Sunbird's "business inventory" because it was "offered for lease to the public." As such, they claimed, the plane was exempt from taxation.
The county counsel's office offered a different story. It was "abundantly clear," deputy county counsel Robert Overby said during the trial, that Argyros' claim that Sunbird actually owned the plane "is a sham."
Overby introduced evidence that Sunbird's headquarters is 949 South Coast Dr., Suite 600, in Costa Mesa—which also happens to be the address of Argyros' office. In addition, he revealed, Argyros owns 99 percent of Sunbird, with the remaining 1 percent owned by another company called Sunbird Aviation Services (SAS). That company was located at—surprise—949 South Coast Dr., Suite 600. Overby described Argyros as "president and sole employee of SAS."
"It is abundantly clear that SAS was nothing more than a subterfuge established between Mr. Argyros and ownership and control of the aircraft when it suited Mr. Argyros," Overby argued. "Yet when it came to tax benefits, Mr. Argyros, 100 percent owner of SAS, made certain he enjoyed the personal benefits of the corporate entity by establishing SAS as a Subchapter S corporation."
Then there was the fact that the plane in question was the only plane Sunbird owned. And the fact that Sunbird chartered the plane to Argyros 60 percent of the time, that Argyros paid a substantially discounted charter rate, and that Argyros could refuse any charter if it didn't suit his schedule.
In other words, Argyros owned the plane. Overby pulled no punches. "To allow such an escape from taxation when the burden of such an escape would be visited upon the remaining general taxpayers of the county, who neither see nor enjoy the benefits of the aircraft, would be an injustice," said Overby during the trial.
The judge agreed. Not only would the county keep the taxes Argyros paid, but he also had to pay county costs for bringing the bullshit lawsuit in the first place.
Sunbird is still around, and Argyros still runs it, but he now flies aboard a newer jet—a 1999 model with the same intriguing tail number "N237GA." But Argyros is now based in Spain, where he serves as Bush's ambassador to Madrid and where the locals treat him as royalty—or will until they know him as we do.