A Washington County businessman who went to federal prison in the 1990s for tax evasion could be headed there again after his indictment this week on multiple counts involving fraudulent loans, tax evasion, bankruptcy fraud, conspiracy and illegal gun possession.
A federal grand jury named George Retos Jr., 69, of Washington, Pa., who has been sparring with the IRS for decades, in a 32-page indictment handed up Wednesday in U.S. District Court.
Prosecutors said Retos defrauded a lender, Preferred Capital BIDCO of Wayne, Pa., in obtaining two loans for a combined $2 million to two of his companies, Prime Plastics and Branikas Investments. Both companies are housed in the same Detroit Avenue property in Washington.
Prosecutors said Retos and others not named lied to BIDCO by saying the loans were for the businesses, but instead used tens of thousands of dollars for himself and his family, including a $41,000 BMW coupe bought for a relative and gambling at the Meadows Racetrack in Washington County and casinos in Las Vegas.
Retos deposited the loan amounts in his business accounts, and then drew on those accounts to pay his personal expenses, the grand jury said.
In a statement, U.S. Attorney Scott Brady said Retos used his companies "as his personal slush fund."
The grand jury also described a litany of other frauds.
First, it said he concealed his income and assets from the IRS to avoid a 2010 order from the late U.S. District Judge Gary Lancaster to pay more than $1 million in income taxes dating to 1987.
Prosecutors said that between 2009 and 2013, he concealed assets by placing business interests in the names of others, paying personal bills using his companies' accounts, issuing checks on the companies' accounts made payable to him, and making ATM withdrawals at casinos using the companies' bank accounts.
The grand jury said Retos also defrauded the IRS in conspiring with another person, unnamed in the indictment, to avoid paying payroll and employer taxes of Prime Plastics and another company he controls, Plastic Power, Inc.
To duck ongoing efforts by the IRS to get him to pay the unpaid taxes, prosecutors said Retos and his cohort arranged for employees of Prime Plastics to be transferred to Plastic Power, which also didn't pay its taxes. The indictment says the taxes owed are in the hundreds of thousands of dollars.
The charges against Retos also include wire fraud in connection with another scheme to fraudulently obtain unemployment compensation from the state for Prime Plastics and Plastic Power employees.
The grand jury said Retos reduced the salaries of employees and told them to seek unemployment benefits to make up the difference, knowing they weren't eligible for compensation.
The state Department of Labor then paid "tens of thousands of dollars" to Retos’ workers for which they were not eligible from 2010 to 2014, all the while Retos was siphoning off company money for casino gambling.
Retos is also charged with false declarations to U.S. bankruptcy court in connection with Prime Plastics in 2013.
The grand jury said the company lied at his direction that there had been no withdrawals outside of normal business in the previous two years when he had been withdrawing money for gambling trips to Las Vegas.
Prosecutors also added a gun charge to the indictment.
Because Retos was convicted of tax evasion, mail fraud, interstate transportation of stolen property and other offenses in federal court in 1992, he's a felon and can't have a gun. The grand jury said he had one on June 26, 2013.
Retos could not be reached Thursday and no attorney was listed for him in court records. The number for Prime Plastics has been disconnected.
He is due in federal court to be arraigned on April 3.
First Published: March 15, 2018, 8:17 p.m.
