Sentinel Staff Writer
September 24, 2008
Federal prosecutors on Tuesday got their man: Big-spending, high-living Frank L. Amodeo pleaded guilty to cheating the government out of $172 million in taxes.
But will the government get its money? That is an open question.
Amodeo's plea deal calls for him to surrender millions of dollars worth of assets, including homes, a jet, two luxury cars and everything owned by Mirabilis Ventures Inc., the company he was trying to build into a worldwide financial powerhouse.
But Mirabilis didn't plead guilty, Amodeo did. So the government's drive to be paid now shifts to bankruptcy court.
In May, the company filed for Chapter 11 bankruptcy protection. On Tuesday, Assistant U.S. Attorney I. Randall Gold filed paperwork asking a judge to throw Mirabilis out of bankruptcy court.
Mirabilis has about $60 million in assets, said its bankruptcy attorney, Elizabeth Green.
It also has creditors other than the federal government, and they've filed claims totaling $180 million.
Who should get what's left of the company? And is Mirabilis even entitled to bankruptcy protection? Those are issues now before U.S. Bankruptcy Judge Karen Jennemann.
Already, federal authorities have seized assets worth more than $13 million.
Amodeo, 48, appeared in federal court in Orlando and pleaded guilty to five felony counts: conspiracy, failure to pay taxes and obstructing an Internal Revenue Service investigation. He faces a maximum of 25 years in prison and fines that could top $360 million.
He remains free on $500,000 bond until sentencing. That hearing has not yet been set.
Amodeo admitted Tuesday to cheating the federal government out of $172 million worth of payroll taxes. The government says it was really $182 million, one of the biggest employment-tax-fraud cases in IRS history.
A former bankruptcy attorney, Amodeo created Mirabilis and began buying distressed companies, including those that provided payroll services and at least one that had serious tax problems.
According to his plea deal, Amodeo never got around to paying off that tax debt. The bigger crime, though, was ongoing: Mirabilis subsidiaries that specialized in payroll services collected federal withholding taxes but never passed them on to the IRS, according to the plea deal.
Tuesday's hearing lasted a painstaking two hours. Much of it was a section-by-section rehash by U.S. Magistrate Gregory J. Kelly of Amodeo's 37-page plea deal.
Did he understand that he could go to prison, the judge asked.
Did he understand each count and what he was admitting, the judge asked.
Yes, Amodeo answered.
Finally, the judge asked, "Sir, do you want to plead guilty because you are guilty or for some other reason?"
"Because I am guilty," Amodeo said.
The judge also asked several questions about Amodeo's mental health and medication. Amodeo suffers from bipolar disorder, a mental illness.
On Monday, defense psychiatrist Jeffrey Danziger testified that although Amodeo is mentally competent, he's still seriously mentally ill and believes that he will, at some point, dominate the world economy.
Defense attorney Harrison "Butch" Slaughter Jr. told the judge Tuesday that Amodeo was clearheaded. At times, during his two years of representing his client, Amodeo has believed he could forecast the future and telepathically communicate with people, Slaughter said.
Rene Stutzman can be reached at email@example.com or 407-650-6394.