Prosecutors said Victor Kearney hired a tax attorney with a history of tax evasion, drug use and soliciting prostitutes as part of a scheme to help Kearney avoid paying taxes on millions of dollars of income from trust accounts he inherited.
Kearney’s attorney said his client naively put his faith in his lawyer and got duped.
“Albuquerque might be the home of a real Saul Goodman,” Paul Linnenburger, Kearney’s attorney, said during his opening statement — a reference to the unscrupulous lawyer in the Albuquerque-based television shows “Breaking Bad” and “Better Call Saul.”
Kearney is accused of making and subscribing false tax returns and a conspiracy charge for allegedly not reporting income from a trust account he inherited after the unexpected death of his wife.
The trial against Kearney got underway in federal court in Albuquerque on Monday. A jury was seated and attorneys made opening statements in the trial, which is expected to run throughout the week before U.S. District Judge James Browning.
The criminal case is the latest courtroom saga for Kearney, who spent years in court unsuccessfully suing his Abruzzo family in-laws, including Benjamin and Louis Abruzzo, and Alvarado Realty Co., or ARCO, the Abruzzo family company that developed Sandia Peak Tramway and the ski areas in Santa Fe and Albuquerque.
Kearney was married to Mary Pat Abruzzo Kearney, who died unexpectedly in 1997 at age 31. Kearney was the beneficiary of two trusts set up by his wife, which paid Kearney about $16 million from 1998 to 2018, according to court records.
As the relationship between Kearney and the Abruzzos soured, Kearney accused the Abruzzo family in court of breaching their fiduciary duties, which reduced Kearney’s trust account income.
Assistant U.S. Attorney Kimberly Brawley said after the ARCO company restructured in 2006, it created an opportunity for Kearney not to report the trust income.
“This presented an opportunity for the defendant, an opportunity he could not resist,” she said.
Brawley said in the years that followed, Kearney collaborated with attorney Robert Fiser in a “simple and straightforward” plot to hide his hefty income to avoid taxes. He even received a $30,000 tax refund one year, she said.
She said Kearney is a self-proclaimed gambler and investor, and judges in other cases involving him have said that he lost most of the money he inherited from the trust accounts.
Fiser previously pleaded guilty in the case and is listed as a witness for the prosecution, according to court filings. Browning earlier this year sentenced Fiser to 15 months in prison.
Kearney was indicted in August 2019. Brawley said in court that prosecutors will show Kearney didn’t pay taxes for years beginning in 2007.
As part of a civil case between Kearney and the Abruzzo family, District Judge Alan Malott in July 2017 notified the IRS and the New Mexico Taxation & Revenue Department that evidence arose during a trial showing Kearney “has not properly reported income he has received, did not file required tax returns in multiple years, and unilaterally altered” income tax reporting forms issued to him by third parties.