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Businessman pleads no contest to 10 tax fraud counts

ALBUQUERQUE, N.M. — An Albuquerque businessman and “horse racing mogul” pleaded no contest Wednesday to 10 counts of tax fraud under an agreement that exposes him to up to four years in prison and requires him to pay $1.2 million in outstanding tax debt, according to court records and the 2nd Judicial District Attorney’s Office.

The businessman, Karl Pergola, 53, runs Rock House CGM LLC, a company that “installs railroad lines,” according to his website. Pergola says he is an “avid horse race fan” who “owns 20 + horses at any given time that are racing nationwide.” A post on his website brags that one of his horses recently won a $55,000 purse. According to Equibase, Pergola’s thoroughbreds have earned $1,991,532 in 319 starts since 2005.

His attorney, Rafael Padilla, could not be reached for comment.

“This guy’s kind of a New Mexico horse racing mogul,” DA’s Office spokesman Michael Patrick said. “But that wasn’t necessarily the root of the problem – that, more or less, revolves around his construction company.”

Patrick said Pergola made millions in business income from 2012 to 2015, but he “did not file any business tax returns until he was under investigation” in 2015. In that period, he failed to pay $1,278,105.38 in gross receipts taxes, according to documents provided by the DA’s Office.

“A lot of his money, we discovered, went to his horse-racing lifestyle,” Patrick said.

An anonymous tipster alerted the state Taxation and Revenue Department, and a subsequent investigation by the Tax Fraud Investigations Division resulted in Pergola’s June 2018 indictment.

Pergola is scheduled for sentencing July 17. A note written into his plea agreement says the defense will ask for a deferred sentence or conditional discharge.