Richard and Jolene Engel, High-Flying Society Couple of the '90s, Hid $180 Million in Income

Categories: Crime-iny
Richard Gardner Engel
In the 1990s, you could not serpentine around a champagne server at a high society soiree in Orange County without bumping into Richard and Jolene Engel. They were everywhere, even landing aboard the P'zazz yacht when the Nordstrom family hosted a private Newport Harbor supper-cruise for New York designer Donna Karan and her artist-sculptor husband Stephan Weiss. That was then. Now divorced, the Engels pleaded guilty Friday to failing to pay taxes on more than $180 million in unreported income from their Costa Mesa business that was supposed to refurbish the AES Corp. power plant in Huntington Beach. Their next fancy parties could be in state prison.

It's been a mighty fall for the power couple, who were part of the small after-party for Mikhail Baryshnikov after Misha had just made his Orange County dancing debut in August 1993 in what is now known as the Segerstrom Center in Costa Mesa.

Opera lovers, the Engels routinely sponsored the appearance of divas who sang in Opera Pacific productions. They arrived at the now-defunct presenter's 1700s-themed masked Opera Ball in November 1990 wearing powdered wigs and matching, custom-made outfits in their signature colors--blue and cream--the same hues of their 12 cars and the offices of their Powerplant Maintenance Specialists, Inc. (PMSI) in Costa Mesa. Richard Engel told a society reporter covering the ball at the time that it was "better than Halloween."

Besides scaring up the party circuit, Jolene Engel gave generously to Republican candidates, including the presidential runs of both Bushes.

Jolene Engel was president of PMSI, which billed itself as specializing in building and maintaining coal-fired power plants for investor-owned utility companies, and Richard Engel was the chief financial officer between 1998 and 2001, when the company's gross revenue exceeded $180 million. Richard Engel's bio stated that among his areas of expertise as principal and corporate counsel were bankruptcy and unfair labor practices.

That last skill is interesting because in late 2000, the Orange County District Attorney's office (OCDA) got a call from a labor union regarding possible fraud related to unpaid PMSI workers rehabilitating the AES plant--the one with the big smokestacks along Pacific Coast Highway in Huntington Beach. A year earlier, the Engels had entered a contract with the plant's then-owner, Southern California Edison, to refurbish the facility for around $108 million.

The contract called for AES to make bi-weekly $6.13 million payments to PMSI to obtain a discount on the contract price, according to the OCDA, which notes the project was estimated to take 90 days from the date the project received the required permits. The contract called for work to be completed by June 1, 2001.

After two years of investigation by the OCDA and the California Franchise Tax Board that began with a search warrant served on PMSI in January 2001, tax evasion charges were filed against the Engels. "This is the first tax evasion case this office has seen where the money owed to the state is in the eight figures," Orange County District Attorney Tony Rackauckas told reporters at a press conference back then.

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