January 8, 2003

MANHATTAN BEACH COUPLE SENTENCED TO PRISON
IN TAX CONSPIRACY STEMMING FROM PSYCHIC BUSINESS

 A Manhattan Beach couple was sentenced to prison today for conspiring to defraud the Internal Revenue Service by failing to report three-quarters of a million dollars in income generated by the wife’s “psychic” business.
 Sonia Merino, 50, the operator of Sonia Psychic Advisor, was sentenced to one year and one day in prison. Her husband, Steve Merino, 44, was sentenced to 18 months in prison.
 The Merino’s daughter-in-law, Nasta Merino, 30, also of Manhattan Beach, was also sentenced today, receiving a three-year term of probation that will include six months of home detention.
 All three defendants were sentenced by United States District Judge Edward Rafeedie, who rejected Sonia and Nasta Merino’s arguments that they should be given leniency because they are members of the gypsy or Romani culture.
 In addition to the prison terms and the probation for the daughter, Judge Rafeedie ordered all three defendants to pay the outstanding taxes due to the IRS, which is approximately $171,685. Sonia and Steve Merino previously agreed to sell their house in Manhattan Beach and to use the proceeds to pay restitution to the IRS; that sale generated approximately $300,000, of which approximately $145,000 was previously paid to the IRS to satisfy a portion of their back taxes which totalled $316,427.
 Sonia Merino was ordered to pay $56,531.76, which will be divided among the 13 individuals who were defrauded by the psychic business.
 All three defendants pleaded guilty last year to conspiracy to defraud the IRS by filing false tax returns for the years 1995 through 1999. The five false tax returns underreported their income by more than $750,000. The income was generated when Sonia Merino charged her clients fees for psychic services, including palm readings, tarot card readings and meditation. Steve Merino managed the business for his wife, while Nasta Merino assisted Sonia Merino in providing clients with psychic services.
 They concealed their income by asking Sonia Merino’s clients to pay with cash, gift certificates or other goods. In some cases, they asked clients to write the word “loan” on checks even though the checks were actually payments for services. Beginning in 1997, Nasta Merino began helping the Merinos hide their income by instructing clients to write checks in her name rather than Sonia’s name, and by allowing Sonia and Steve to hide their income in Nasta Merino’s bank account.
 This case is the result of an investigation by IRS-Criminal Investigation and the Manhattan Beach Police Department.

 Release No. 03-004

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