In a deposition given on Jan. 9 and obtained by The Florida Independent, a former employee of Rep. Vern Buchanan, R-Sarasota, alleges that he reported Buchanan to the U.S. government in 2008 for tax evasion and conspiracy to evade U.S. income tax, and that he has been in contact with federal officials about Buchanan.
According to his deposition, which was taken under oath, Rosa first started working for Buchanan in 1998, when he was hired as CFO of Sarasota’s Buchanan Automotive Group. Rosa says in the deposition that he also acted as treasurer for many of Buchanan’s other organizations during the span of his employment.
But his tenure with Buchanan ended only five years later, in December 2003. And throughout “virtually the entire period” of his employment, according to Rosa, he was witness to “fraud and crime” that led him to request an IRS investigation into Buchanan.
The January deposition, which was given to the Independent by Duane Overholt, a consumer fraud advocate, was taken as part of a lawsuit filed by William Brooks (who owned a car dealership eventually bought by Buchanan’s company) against Mark Ornstein, Buchanan’s lawyer. Though Buchanan himself isn’t a party to the case, Rosa makes several references to Buchanan’s business dealings throughout the deposition.
“There was a fraud and crime that predated my employment and went on through virtually the entire period of my employment,” Rosa says in the deposition. “I’m going to reference to one incident, which was an evasion of U.S. income tax, also a conspiracy to evade U.S. income tax. I reported it to the federal government. I’ve received recent correspondence that the matter has not been terminated by the federal government. And this federal crime predates my employment and went on virtually the bulk of my employment with Buchanan.”
According to an email sent by Rosa to law enforcement officials in June 2011 (also given to us by Overholt), his former employer “described during the employment interview process what [Rosa] later came to understand (and also has confirmed through the review and concurrence of his two legal counsels) to be a scheme which Employer should have known to be a tax fraud, and that such scheme was implemented by Employer through a conspiracy to commit Federal income tax fraud.”
According to Rosa’s deposition, the scheme “continued and expanded in complexity, and the number of participants grew throughout the vast majority” of his employment with Buchanan.
Buchanan also “directed the preparation of blatantly false spreadsheet records regarding the business use of an aircraft to induce outside CPAs to include fraudulent income tax deductions in U.S. Individual Income Tax Returns, and Federal Forms 1040,” according to the email. According to Rosa, Buchanan “asserted this aircraft was operated under the FAA rules for ‘General Aviation,’” while it was actually being operated under regulations applicable to “Commercial Aviation.”
In his deposition, Rosa alleges that some of Buchanan’s entities were created “so that Vern could get a favorable tax treatment on his personal jet.”
According to the National Business Aviation Association, if someone were to fly a plane for a personal or business reason and file it instead as something they made money on (or vice versa) that person could run into trouble with both the IRS and the Federal Aviation Administration.
From a financial standpoint, those who use airplanes to generate revenue are taxed at a different rate than those who use them for personal reasons. From a safety standpoint, any company that falsifies how it categorizes its flights would be ignoring federal safety regulations. Per FAA rules, the closer a flight gets to a commercial airliner, the more mandates there are.
Before he was employed by Buchanan, Rosa writes in his email, his future employer “routinely produced and disseminated financial statements that disguised the financial position of business entities,” directing that “cosmetic” entries be “placed on financial statements to inflate reported equity and working capital, and loans to shareholder Employer were not disclosed on Employer’s personal financial statement.” He concludes his email by writing that he “has been contacted by at least one Federal attorney and by at least one agent of the federal government” about the alleged tax fraud scheme.
Rosa had no comment for the Independent. A representative from the IRS says the agency does not comment “on any individual investigation relative to any taxpayer of any kind.”
After allegedly being “driven out” of the company by Buchanan and his business partner, John Tosch, Rosa says he had trouble finding work — a sign that perhaps Buchanan had “blackballed” him in the auto industry.
According to the deposition, before leaving, Rosa requested an exit interview with Buchanan, in order to secure a solid reference for future positions at other car dealerships:
So I talked to John, I said, John what kind of reference would you folks be able to give me? And Tosch told me that it’s going to depend on how Vern feels at the time. And instinctively I knew, okay, I’m being coerced, and they’re going to hold the ability for me to get work in the car industry based upon when I leave the organization and what I say and do afterwards.
From the deposition:
Q. Did Vern give you a reference?
A. He told me he would.
Q. Did he?
A. Not a written one.
Q. Did he give a verbal reference?
A. He told me he would give me a good reference.
W. And do you know whether or not he did?
A. No, I do not.
Q. Do you know if Vern helped you in any way to get a job after you left?
A. No, I do not.
Q. Was there a hesitation there?
A. Because one of the things that I had been concerned with was that I had two employment opportunities dry up very fast. And what I was concerned with was, I was being blackballed by Mr. Buchanan or by somebody in his organization. …
I know that, from what I had learned when I worked for Mr. Buchanan in Sarasota, that a fixed operations director there, Paul Levine, was blackballed by Vern in the organization, I heard it from numerous people. I spoke with Paul Levine as recently as several month ago. It had gotten back to Paul that Vern had blackballed him in Sarasota, and he had to go to Orlando to get a job.
I knew of the difficulty that Richard Thomas had in locating jobs. I knew he had some employment opportunities evaporate. I knew that Don Whittaker had some difficulty getting some jobs. And each of these individuals had the question in the back of their minds, that they expressed to me, was it Vern.
When Rosa later called his former employer looking for COBRA information, he alleges he was told by Buchanan that he needed to sign a resignation letter first.
“I said, Vern, number 1, it wouldn’t be true for me to sign a resignation letter, you drove me out of there,” Rosa says in the deposition. “You see, I considered being fired by a tax cheat and a conspirator to evade U.S. taxes a badge of honor. And I told Vern it would not be true for me to sign a document, and I refused to. ”
In his deposition, Rosa refuses to answer whether or not he demanded millions of dollars from Buchanan during settlement negotiations, but does say he reported Buchanan to the IRS after a settlement meeting in July 2008.
Buchanan’s office did not respond to calls from the Independent.
Last year, the FEC charged that Buchanan’s former business partner, Sam Kazran, and a dealership the two once co-owned, had violated campaign laws by using funds from the company “to reimburse [dealership] employees, Kazran’s business partners, their family members and Kazran’s relatives for $67,900 in contributions to Buchanan’s 2006 and 2008 Congressional campaigns.”
Kazran has long maintained that he was directed to reimburse the donations by Buchanan himself, but the FEC questioned Kazran’s credibility in its report on the allegations, arguing that his testimony needed “stronger corroboration.”
But the commission also took testimony from Rosa, who testified that Buchanan asked him to help ensure an employee received a reimbursement for a political contribution as far back as the early 2000s. When he told Buchanan that such reimbursements were illegal, Buchanan replied, “Finesse it,” according to Rosa’s deposition. According to the FEC general counsel’s report (.pdf), Buchanan denied having the conversation at all.
Later, Buchanan’s lawyer told the FEC “that the phrase ‘finesse it’ could be interpreted in different ways and that Buchanan might interpret such a statement differently than Rosa did.” In its report, FEC general counsel noted that neither the lawyer nor Buchanan offered “any examples of alternative interpretations.”
View Rosa’s deposition in full here: