UPDATE: Jolene Engel told City News Service's Paul Anderson today that she left Powerplant Maintenance Specialists Inc. in 1998 but remained president in name only through June 30, 2001, when Richard Engel assumed that position. She added she separated from Richard in 1999, was divorced by 2000 and had no idea the company's taxes were not being paid, saying she should have been more diligent. "I've been asking to pay the money since 2002," she said of restitution. "The DA kept changing their mind about what I owed." She agreed with her ex-husband that negative publicity hindered his ability to raise his restitution and said the prison term will likely cost him his law license that the state bar suspended in June 2012. "Like he said (in court), his life is gone,'' Jolene said of Richard. "... I feel very badly that he's going to prison. It's so hard to see someone you know for so many years go to prison." But Senior Deputy District Attorney Bill Overtoom told Anderson that Richard Engel could have avoided his fate. "He's had substantial income and he still hasn't paid his taxes," Overtoom said. "We all have to pay our taxes whether we like it or not, so state prison is appropriate."
A once-wealthy Newport Beach socialite failed to come up with $300,000 in restitution and was sentenced today to seven years in state prison for not paying taxes related to his former power plant refurbishing business. Richard Gardner Engel's ex-wife Jolene Engel, who was once president of the couple's Powerplant Maintenance Specialists Inc. (PMSI) business in Huntington Beach, already paid more than $1 million in restitution, had her felony charges knocked down to misdemeanors and was sentenced to three years probation.
Between the two them, the former couple owed $1.3 million in unpaid state and corporate taxes for failing to report $180 million in income from PMSI. Both pleaded guilty to felony charges against them in December 2011, and Richard Engel had repaid about $300,000 in restitution in hopes of being on his way to the kind of plea deal that spared prison for his ex.
The rest was to come from proceeds in a $400 million business deal that, Richard Engel claims, fell through due to an Orange County District Attorney's office press release on his criminal case. "The DA has made it impossible for me to perform based on its malicious, inaccurate press release," Engel wrote in a letter to Orange County Superior Court Judge William Froeberg in the fall of 2013. Engel added he would get the remaining restitution money through a loan from a friend.
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His former company won a contract in October 2000 from AES Corp. to refurbish the Surf City power plant. Despite receiving $36 million in payments between Oct. 4 and Dec. 31 of that year, PMSI performed nearly no work. More than $24 million from the project was diverted to put a down payment on a Learjet and buy lavish jewelry and expensive cars. The company filed for bankruptcy protection in 2002.
Richard Engel, who followed Jolene as the PMSI president after first starting as chief financial officer, pleaded guilty to four felony counts of failing to file tax returns for the corporation, three felony counts of filing false personal tax returns and a felony count of failing to file a personal return.
His former wife originally copped to felony failure to file tax returns for her corporation and felony failing to provide material information in a tax return, the counts that were knocked down to misdemeanors under her deal with the court.