The husband-and-wife owners of Poor Red’s, a popular barbecue-and-bar fixture in the small community of El Dorado, have been sentenced to jail time in connection with multiple felony counts of state tax evasion and insurance fraud.
Michael Adams was sentenced to six years, eight months in state prison and ordered to pay $629,818 as restitution for unpaid taxes and investigation costs. His wife, Brenda Adams, was sentenced to a year in the El Dorado County jail and ordered to pay an identical sum. Sentences were handed down Friday.
“The ripple effects created by those who commit fraud impact not only the company or employees who were scammed, but also have a devastating impact on business and society by creating unfair competition and raising prices and costs for everyone,” El Dorado County District Attorney Vern Pierson said in a statement.
The Adamses were arrested in April last year following a joint investigation by the California Board of Equalization, Employment Development Department, Franchise Tax Board, Department of Insurance and officials with the El Dorado District Attorney’s Office. The couple originally was charged with 30 counts of evading state income and employee tax payments.
In August, they pleaded guilty to eight felony counts as part of a plea deal with El Dorado County. At sentencing, the county said the Adamses had failed to report $1.32 million in taxes.
Both were scheduled to be sentenced in December last year. However, a release from the El Dorado District Attorney’s Office said a delay was necessary “in order to attempt to obtain transfer of ownership of Poor Red’s.”
On Monday, El Dorado County investigator Dave Stevenson said the Adamses had been in prolonged talks to sell Poor Red’s but did not reach an agreement with a prospective buyer. Stevenson said Poor Red’s, which has been closed for months, is still owned by the couple. They purchased Poor Red’s in 2007.
The future of the restaurant, on Pleasant Valley Road southwest of Placerville, remains unclear. Stevenson said there is “some buzz” among real estate officials and others about buying the site, but no concrete offer has been made.
Poor Red’s opened in 1948 and became something of a Northern California institution, famous for its Golden Cadillac cocktails, a frothy blend of Galliano, half-and-half, white creme de cacao and ice.