Wife pleads guilty to evading taxes for husband's dental practice

The wife of an orthodontist in California who was accused of preparing false financial statements for his practice that underreported its profits and evaded the payment of more than $870,000 in U.S. taxes, pleaded guilty on November 5, according to the U.S. Department of Justice.

Pilar Rose, 51, formerly of Fresno, CA, pleaded guilty to tax evasion and obstructing an IRS audit. Also, she agreed to forfeit her interest in more than $2.5 million in proceeds from the sale of her and her husband's mansion and BMW that authorities previously seized, according to a press release published on November 5 by the U.S. Attorney's Office for the Eastern District of California.

Rose will be sentenced in March. She faces a penalty of five years in prison and a $100,000 fine for the tax evasion charge and an additional three years in prison and a $5,000 fine for the obstruction charge.

From 2012 through 2015, Rose reportedly prepared false financial statements for her husband's orthodontics practice that significantly underreported its profits. In early 2016, Rose allegedly obstructed an IRS audit of her and her husband's taxes by altering hundreds of checks that were for their nondeductible personal expenses, including their mortgage, landscaping, pool cleaning, cars, credit cards, and children's college tuition, to make it appear like they were for deductible business expenses, according to the release.

Additionally, Rose purportedly created false statements for her husband's practice to match the altered checks. She reportedly provided the fake statements and altered checks to the IRS to avoid paying the taxes they owed, according to the release.

In June 2015, Rose applied for a $1.5 million home mortgage refinance loan on the couple's mansion. To prove their creditworthiness and induce the bank to make the loan, Rose reportedly submitted copies of her and her husband's U.S. tax returns that showed significantly greater income than was reported on their tax returns. After discovering the discrepancies, the bank declined the loan.

In July 2015, Rose applied to another bank for a $1.5 million loan to refinance the mansion. In the application, she reportedly misrepresented what they had in their bank accounts. She claimed there was more than $250,000 when the balance was less than $3,000. Additionally, she submitted copies of their tax returns and a profit and loss statement that significantly inflated the profitability of her husband's orthodontics practice. This bank approved this loan, according to the press release.

In September 2017, Rose bought a new BMW sedan worth about $90,000. She made a $25,000 down payment and financed the remaining $65,000 through a loan she obtained from a third bank. In the loan application, Rose purportedly misrepresented that she was an attorney who made more than $600,000 per year. She was not an attorney.

Additionally, Rose allegedly used the Social Security number belonging to her husband's former dental school classmate for the application because she knew her number would show a low credit score. Using the fraudulent information, Rose received the loan, according to the release.

A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.