Man Pleads Guilty to Payroll Tax Evasion

A Dana Point man pleaded guilty Wednesday to helping his former boss at a Huntington Beach landscaping company cheat the government out of $625,000 in payroll and unemployment taxes.

Gregory J. Novosel, 46, who was vice president of Environments West Inc., pleaded guilty in federal court in Los Angeles to single counts of conspiracy and tax evasion.

Novosel said he helped set up a sham company to conceal the now-defunct EWI’s payment of wages and avoid payroll taxes from 1989 through 1991.

In an 11-count federal indictment Jan. 29, Novosel and former EWI President Roger William Borland were charged with conspiracy and evading corporate and personal taxes. Borland, 44, of Irvine, is scheduled for trial April 22 before U.S. District Judge J. Spencer Letts, Assistant U.S. Atty. David C. Marcus said.

The government contends that EWI diverted $1.7 million to the sham company, called Coastal Pacific Services, disguising the money as payments to a subcontractor. Novosel and Borland then paid themselves and other EWI employees about $1.6 million through the Coastal account without reporting the payments to the Internal Revenue Service, Marcus said.

Federal sentencing guidelines call for Novosel to be sentenced to 24 to 30 months in prison. His plea agreement states that prosecutors may recommend less prison time if he cooperates fully.

Borland’s lawyer, Paul W. Raymond of Newport Beach, declined comment.