On The Money: Alizadeh Arraignment

By Mike Luery

ROSEVILLE, Calif. (CBS13) -- A Roseville businessman accused of grand theft was in court today on a case involving millions of tax dollars. Abe Alizadeh is now facing 105 felony counts for allegedly not paying $7.1 million in sales taxes and unemployment taxes due the State of California. So what exactly happened to those funds?

"They were diverted for other businesses and perhaps for personal use," said Ron Smetana, a senior assistant Attorney General.

Alizadeh was in Auburn to be arraigned in court, but he had little to say in his own defense. The former owner of 71 Jack in the Box restaurants across California has been the subject of several On The Money reports – since being named to the list of California's biggest tax delinquencies, published by the Board of Equalization. (Click here and look for name: Abolghassem Alizadeh)

But now Alizadeh is facing criminal charges. Ron Smetana, who is prosecuting the case for the Attorney General's Office told CBS 13, "Even though the Jack in the Boxes were profitable, money was siphoned from those enterprises to the real estate."

Smetana told CBS 13 in an exclusive interview outside the Auburn jail, "We're told by employees that as much as a million dollars a month was going from the Jack in the Boxes out to the real estate ventures. At the same time, Mr. Alizadeh was building a 13 thousand square foot home on 2.3 acres." That home later went into foreclosure, Smetana explained.

Abe Alizadeh did not enter a plea in court today. He is in the process of changing attorneys and was granted a continuance in his case.

Alizadeh came to this country from Iran years ago and quickly became an All American success story in acquiring multiple Jack in the Box restaurants.  Now he's looking at the potential of years in prison. He will be back in Placer Superior Court to face formal arraignment with a new lawyer on March 18th.

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