Man pleads guilty to tax fraud

A South San Francisco resident pleaded guilty to tax fraud in federal court Friday, authorities said.

Robert Stein, 55, entered the plea in front of U.S. District Judge Susan Ilston, according to a statement from David L. Anderson, the U.S. attorney for the Northern District of California. By doing so, he admitted to misleading investors and concealing more than $400,000 in commission income after going into business with another person he met in prison while serving time for another fraud, Anderson said.

He will be sentenced Oct. 30 and faces a maximum sentence of three years in prison and a $250,000 fine.

Stein, who also used the names Mikhail Solovey and Michael Swarovski, admitted to the court that he met someone in prison referred to by authorities only as S.Z., who was serving time for investment and securities fraud, Anderson said.

When the two were released from prison, S.Z. offered Stein a marketing job to be paid by commission. Anderson said Stein was tasked with selling securities and recruiting investors beginning in late 2012. The job continued into 2017.

Stein lied to investors by concealing his prior fraud convictions and by misrepresenting his name and his background, Anderson said. He and S.Z. also overstated to investors the financial results of their investments, he said.

According to the plea, Stein convinced investors to spend at least approximately $2.3 million with S.Z., who then turned around and paid Stein a commission of $416,564.

Anderson said Stein didn’t report that commissions on his individual tax returns. Instead, according to Anderson, Stein deposited the commissions into two separate bank accounts of nominee corporations from 2014-17. He also hired a tax return specialist to prepare and file the false tax returns on the nominee corporations, causing the concealment of $98,197, Anderson said.