Jay Scott Soderling, formerly of Healdsburg and now reported to be living in Hidden Valley Lake, was arrested on Wednesday on one count of tax evasion, according to a report from United States Attorney Melinda Haag and Scott O’Briant, special agent in charge of the Internal Revenue Service's Criminal Investigation division.
Soderling, 54, made his initial appearance in federal court in San Francisco on Thursday before federal Magistrate Judge Jacqueline Scott Corley, the US Attorney's Office reported.
During the brief arraignment, Soderling entered a not guilty plea and was assigned Geoffrey Hansen as his defense attorney, according to case documents. Assistant US Attorney Tom Moore is prosecuting the case with the assistance of Kathy Tat.
Following the hearing, Judge Corley signed an order directing the US Marshal to release Soderling on his own recognizance.
An investigation by the Internal Revenue Service Criminal Investigation division led to the prosecution, the IRS and US Attorney's Office said Thursday.
A federal grand jury indicted Soderling on the tax evasion charge on Aug. 9. An arrest warrant was issued the same day, and the US Attorney's Office succeeded in having the court seal the indictment in order not to tip off Soderling to his pending arrest.
The indictment stated that Soderling, the owner of Ripp It Earth Movers, willfully attempted to evade paying $161,155.44 in federal income and employment taxes due for tax years 1995 through 2004.
He allegedly placed assets in the names of nominees, dealt in currency, caused debts to be paid through and in the name of nominees, submitted a false financial statement to the IRS and made false statements to an IRS revenue officer, according to court documents.
The case against Soderling also alleges that he used funds from a nominee bank account to pay creditors, spend for a Hawaiian vacation, a Mastercraft boat and trailer, and a Dodge Viper.
He faces a maximum of five years in federal prison and a fine of $250,000, the US Attorney's Office said.
This isn't Soderling's first brush with federal prosecution.
Soderling and his brother, Leif, pleaded guilty in 1987 to bank fraud for stealing millions of dollars from depositors in their roles as directors and officers at the Golden Pacific Savings & Loan in Santa Rosa, based on case documents.
Court documents stated that the Soderlings did eight months in prison and were ordered to pay $6 million in restitution to the Federal Deposit Insurance Corp.
Rather than making payments on the restitution, however, a 1990 Fortune Magazine report said the Soderlings went on a $500,000 spending spree while on probation. A judge sent them back to prison for six years each.
After the Soderlings were released, Jay Soderling found himself back in federal court once again for violating his probation. In December 1997 Magistrate Judge Bernard Zimmerman sentenced Soderling to six more months in prison, according to the case history.
Over the last several years the brothers had been involved in unlicensed construction activities in Lake County and racked up large bills with local vendors. Ripp It Earth Movers is not licensed by the California Contractors State License Board, and neither of the Soderlings currently has an active contractor license, according to the board's online license database.
Neighbors of some of Jay Soderling's building projects in the Clearlake Park area told Lake County News that he attempted to harass and intimidate them. Soderling also clearcut oak woodlands on property he owned surrounding Borax Lake.
At one point in 2008 Jay Soderling had set up a pump to try to empty out Borax Lake. This reporter witnessed the setup, which neighbors later brought to the attention of state officials.
Neighbors told Lake County News that Soderling was trying to empty the lake to develop the land as part of a large subdivision.
According to a Santa Rosa Press Democrat article, Soderling had borrowed money from Sonoma County developer Clem Carinalli and backed up the loans with the 850-acre Borax Lake property. Carinalli foreclosed on the Borax Lake land in 2009.
E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow Lake County News on Twitter at http://twitter.com/LakeCoNews, on Tumblr at www.lakeconews.tumblr.com, on Facebook at http://www.facebook.com/pages/Lake-County-News/143156775604?ref=mf and on YouTube at http://www.youtube.com/user/LakeCoNews.