Prior to James Pflueger’s sale of an investment property in San Diego, the retired car dealer had racked up unpaid bills totaling more than $1 million from the lawyers, engineers and expert witnesses he hired after the 2006 Ka Loko Dam failure that killed seven people, Los Angeles certified public accountant Dennis Lawrence Duban said in U.S. District Court on Wednesday.

Duban said some of the people had been pressuring Pflueger for their money and some even called him to get the bills paid.

Duban is testifying as a prosecution witness in Pflueger’s federal conspiracy and tax fraud trial.

He said he falsified Pflueger’s tax returns to understate Pflueger’s capital gain and tax liability on the 2007 sale of the San Diego property because Pflueger needed the money.

“The money was very important to continue the defense. It was a bad decision but was done to protect the money,” Duban said.

Duban did not say whose idea it was to falsify the tax returns, and prosecutor Les Osborne didn’t ask him.

IN A DEAL with the federal prosecutor, Duban pleaded guilty last October to preparing a false income tax return for Pflueger and admitted that he assisted Pflueger in creating an offshore trust to deposit more than $14 million of the proceeds from the sale of the San Diego property into a Swiss bank.

A portion of his plea agreement is filed with the court under seal.

Duban said he helped establish the trust to protect Pflueger’s money and to shield it from plaintiffs. He said Pflueger told him he wanted the sale and money transfer kept confidential because Pflueger didn’t want others to know why he needed the money.

By May 2009, Duban said Pflueger had withdrawn all but $1.8 million from the Swiss account to pay accounting and legal fees, repair work on his Kauai properties and to forward to his son Charles Pflueger, who had requested $3 million to $5 million for the car dealerships.