Tax-Evading Imperial Grower to Close Farm

A multimillionaire farmer who pleaded guilty in San Diego federal court to evading more than $10 million in income taxes has told Imperial County officials he plans to lay off 2,215 employees and close his farm.

Mario Saikhon, 59, in a letter to the Imperial County Board of Supervisors dated July 29, said he will permanently discontinue all local farming operations effective Oct. 2.

“All employees will be affected by this closing, including those currently on seasonal layoff,” Saikhon said in the letter.

Saikhon was required to notify local officials of the decision under the federal Workers Adjustment and Retraining Notification Act.

Two local employees who asked not to be identified told the Imperial Valley Press that they and all other employees received notice they would be laid off effective Oct. 1.

The closure means the end of Saikhon’s self-made Imperial County farming empire. It was not immediately known what would happen to his agricultural operations in other areas of California, Arizona and Mexico.

Saikhon did not return telephone messages left at his office in Holtville by the Associated Press.

Saikhon has agreed to pay the federal government up to $23 million in fines, back taxes, interest and penalties in what federal officials said was the largest U.S. tax settlement of its kind.

He owns more than 3,000 acres of land in Imperial County and has extensive agricultural operations in Holtville.

City Manager Richard Ferguson said the city will lose tens of thousands of dollars yearly as well as thousands of jobs.

“It will have a domino effect. You lose one job and that causes the loss of another job,” he said. “People who worked for Saikhon won’t be spending their paychecks at 7-Eleven or Imperial Stores or Vogel’s. . . . It could mean some stores will close or at least have to lay off employees.”

Saikhon pleaded guilty June 9 to evading more than $10 million in federal income taxes by bribing an Internal Revenue Service auditor.

Under a plea agreement with prosecutors, Saikhon faces a criminal fine of $1.25 million and up to eight years in prison. Sentencing is scheduled for Sept. 21.

Assistant U.S. Atty. Phillip Halpern has said the massive amount of taxes Saikhon allegedly failed to pay “dwarfs Leona Helmsley.”

Hotelier Helmsley is serving a four-year prison sentence for evading $1.7 million in taxes by billing personal expenses to her businesses. She was convicted in 1989.

Prosecutors said Saikhon bribed IRS auditor Robert Morales Sr. with more than $600,000 to help him concoct a scheme to avoid paying tens of millions of dollars in taxes in the 1980s.

Morales, 63, of El Cajon, was fined more than $600,000 after pleading guilty to accepting the bribes and is serving a 12-year prison sentence. His son, accountant Robert A. Morales Jr., is serving a 41-month prison term for assisting in the scheme.