Las Vegas Sun

March 29, 2024

Trash executive battles IRS

A Silver State Disposal Service owner, fighting charges of criminal tax fraud, is entangled in another dispute involving $2.1 million in alleged unpaid taxes.

Vice President and co-owner Richard Isola has been fighting the Internal Revenue Service for two years over taxes against an inheritance he received from his mother.

The IRS has asserted that the inheritance -- stock in the privately traded garbage company that holds a monopoly on trash collection in the Las Vegas Valley -- is worth $4.5 million, court papers showed.

But Isola, who also serves as an executor for his daughter's portion of the inheritance, has repeatedly maintained that the value is $1.3 million.

"The (IRS) commissioner erred in her determination of the fair market value of the ... shares," Isola's attorney, James Hardesty of Reno, wrote in the 1994 petition or lawsuit.

While Isola has taken an aggressive legal position in the civil case, he is on the defense in a criminal case filed April 9 against him and others. The son of Silver State co-founder John Isola last week pleaded not guilty to the charges and has refused to comment on the case.

His attorney, Richard Wright, said he was not familiar with the civil suit and also declined comment.

A 26-count indictment accuses Isola and his co-defendants of using Silver State funds to pay for personal items, and ordering garbage workers to make home improvements on company time.

The government charges that Silver State officials included the personal items with overall expenses, which were used to justify raising trash collection rates in 1990 and 1994.

County and city officials plan to review the indictment to determine if the new information would have changed the current monthly rate of $9.70.

The indictment cites as examples of the alleged purchases an estimated $175,600 worth of items, among them seafood, snowmobiles and televisions.

Isola is accused of buying with company funds a Jet Ski and a $2,400 refrigerator. The co-owner also is charged with using workers to improve his vacation home along the Rogue River in Oregon, and his son's house on Mount Charleston.

Additionally, the indictment charges Isola of falsely stating his income in 1990, 1991 and 1993, reported at $277,000, $157,000 and $637,000 respectively.

Despite the government's scrutiny of Isola's tax returns in the civil case, IRS Special Agent Mike Berry said he did not use the information to build the government's criminal case.

"We're keeping a real arms-length distance between them," Berry said Tuesday. "I was doing my investigation and that was going on and I wasn't even aware of it."

The civil case involves the calculation of gift taxes in 1989 and estate tax in 1991.

IRS attorney Wendy Harris declined to comment on the civil case, citing a policy prohibiting discussion of pending litigation.

Isola's co-defendants are the company, President Joseph Anstett, Vice President Thomas Isola, corporate officer Aldo Lippetti, managers Craig Carstensen and Carl Carlton Jr., and Foreman Frank Meccariello.

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