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Pet store owner granted deferral of guilty plea for tax evasion

CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM

Sheryl Luke-Kalani pleads to tax evasion charges for a business connected with a Waimanalo puppy farm on April 10.

A woman whose pet store was connected to a Waimanalo puppy mill owned by her father is getting the chance to avoid conviction for tax evasion.

Sheryl Luke-Kalani, 52, pleaded guilty in April to six counts of attempting to evade paying state general excise taxes and six related charges of failing to file a tax return. The charges stem from state GE taxes she owed on rental income for the tax years 2007-2012 and are not related to the pet store or puppy mill.

State Circuit Judge Edwin Nacino granted Luke-Kalani’s request Wednesday for a deferral of her guilty pleas and set the period of deferral at five years.

The charges against her will be dropped if Luke-Kalani stays out of any more trouble with the law and follows all of the other conditions Nacino imposed, including paying the $16,919 she owes to the state Department of Taxation, $2,310 in court costs and fees and performing 300 hours of community service. She must also cooperate with state efforts to investigate whether she owes any more back taxes and to pay them.

If Luke-Kalani fails to comply with any of the conditions of her deferral, Nacino could accept her guilty pleas, find her guilty and sentence her up to five years in prison for each of the tax evasion charges and up to a year for each of the tax return counts.

Nacino told Luke-Kalani he granted her the deferral as an incentive to keep her criminal record clean even though he was bothered that her written sentencing statement “doesn’t really explain why you didn’t pay taxes for the amount of years. I can see one year being a mistake, even two or three years.”

He said deferrals are reserved for people who make one-time mistakes.

Luke-Kalani told Nacino she was sorry for what she did and that she won’t do it again.

Luke-Kalani owned The Pet Spot in Pearl City and property in Waimanalo that housed a puppy mill. Her father Vernon Luke was president and treasurer of Bradley International, the company that operated the puppy mill. The Hawaiian Humane Society raided the Waimanalo property in 2011 and seized 153 puppies and dogs living in squalid conditions.

The manager of the puppy mill pleaded guilty to 153 counts of animal cruelty and was sentenced in 2012 to six months in prison. Bradley International was fined $306,000 and assessed $379,116 in court fees and restitution, but Luke dissolved the company without paying any of the money.

Luke, 76, has also been charged with tax evasion and failing to file tax returns for GE taxes on rental income from 2007-2012. He was scheduled to appear in court today for a hearing to determine whether or not he is mentally fit to stand trial and can be held responsible for the charges against him.

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