Judge Lets Real Estate Investor Accused Of Tax Evasion Withdraw Guilty Plea

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A San Francisco real estate investor has won the right from a federal judge to withdraw his guilty plea to a tax evasion charge and have a trial instead.

Luke Brugnara, 45, is accused of three counts of tax evasion in failing to report $45 million in real estate profits on his tax returns for the years 2000, 2001 and 2002.

He pleaded guilty in May to one of the counts, admitting that he did not list $15 million in profits from the sale of two downtown San Francisco buildings in 2000.

But Brugnara soon afterward sought to withdraw the plea, arguing that he made the plea under the influence of "fear and stress" from two other criminal cases and three bankruptcy cases.

In the two other criminal cases, pending in federal court and in Santa Clara County Superior Court, Brugnara is accused of poaching steelhead trout, a threatened species, on property he owned in Gilroy.

In a ruling issued on Wednesday, U.S. District Judge William Alsup granted Brugnara's motion to withdraw his plea. Alsup set a Feb. 1 trial on the three tax evasion counts.

Alsup wrote that Brugnara's guilty plea was "knowing and voluntary" and did not appear to be the product of stress.

But Alsup said he was granting the bid for a trial for a different reason, which he called a "powerful practical consideration."

The judge said that because of the seriousness of the offense, it was "at least plausible" that he would have sentenced Brugnara to a longer prison term than the one and one-half years to two years that prosecutors and defense lawyers agreed to in Brugnara's plea bargain.

If that happened, under the plea agreement Brugnara would have been allowed to withdraw the plea and go to trial. Therefore, the "practical course" was to set a trial date now, Alsup wrote.

Brugnara's lawyer, Harris Taback, said the decision was "fair and just."

Brugnara is scheduled for a separate trial in January before a different federal judge in San Francisco on the poaching charge.

Between October 2008 and January 2009, Brugnara filed Chapter 11 bankruptcy claims for three of his seven real estate corporations.