Cover of The Godfather’s Other Ledger

The Godfather’s Other Ledger

The Godfather’s Other Ledger

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Summary
 Iris Rabaya Au formed shell companies and opened bank accounts at the direction of her then-boyfriend, Adam Iza, who called himself “The Godfather.” According to the government’s account of her plea, funds moving through those accounts paid approximately $1 million to sheriff’s deputies, supported nearly $10 million in recreational spending, and purchased approximately $16 million in cryptocurrency for Iza.Au admitted transferring more than $2.6 million from the company accounts into her personal accounts between 2020 and 2023 and willfully failing to report that income. Prosecutors also argued that she concealed entities and income from her tax preparer. She pleaded guilty to subscribing to a false return. On September 21, 2026, she was sentenced to 18 months in prison, ordered to pay $1,484,343 in restitution, and ordered to forfeit luxury assets.I follow the accounts behind the spending, distinguish money moved for someone else from money received personally, and explain why a preparer needs the complete financial picture before a taxpayer signs a return.Key TakeawaysReconcile transfers into personal accounts separately from payments made for an entity or another person.Give the return preparer a complete list of relevant entities and accounts.Support labels such as “loan” or “reimbursement” with records showing what happened.Compare the completed return against the underlying account reconciliation before signing.Coordinate tax corrections with the broader defense when funds may have an illegal source.The IRS Criminal Investigation Voluntary Disclosure Practice excludes taxpayers with illegal-source income.Resources and Legal ReferencesCentral District of California sentencing account: Au’s sentence, admitted transfers, forfeiture, and prosecutors’ preparer-concealment argument.Central District of California plea announcement: The government’s account of what Au agreed to admit.IRS-CI case account: Agency account of Au’s disposition and the financial structure.Related Saavedra sentencing account: A separate recipient’s false-return case within Iza’s operation.26 U.S.C. § 61: Gross income from whatever source derived.26 U.S.C. § 7206(1): Willfully subscribing to a materially false return under penalties of perjury. The official case accounts describe Au’s offense as false subscription; the filed charging document was unavailable for this draft.Rutkin v. United States, 343 U.S. 130 (1952): The Supreme Court held that extorted funds can be taxable income when the recipient controls and derives economic value from them. This is a comparison of tax principles, not a ruling about Au.IRS Criminal Investigation Voluntary Disclosure Practice: Current eligibility guidance, including its illegal-source-income exclusion.The Law Office of Jason Carr, PLLC.DisclaimerThis video is for informational and educational purposes only and does not constitute legal or tax advice. Viewing this video does not create an attorney-client relationship between you and The Law Office of Jason Carr, PLLC. The discussion is based on publicly available information and is not a complete analysis of any person’s legal rights, defenses, tax obligations, or case facts. Any commentary about what a taxpayer, business owner, or advisor “should have done” is general educational discussion only and may not apply to your situation. If you have a specific legal or tax question, consult a qualified attorney or tax professional licensed in your jurisdiction.Comment PolicyPlease do not post confidential, sensitive, or personally identifiable tax information in the comments. We do not provide individualized legal or tax advice in the comments or social media replies.
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