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$600K In Cash Found In Home Of Alleged Tax Dodger

PORTOLA VALLEY (CBS SF) -- A Portola Valley restaurateur pleaded not guilty on Tuesday to evading nearly $1 million in taxes for his three restaurants in Redwood City, San Jose and Portola Valley, prosecutors said Wednesday.

Russell Deutsch, 57, has been charged with eight counts of tax evasion, eight counts of filing false tax returns and grand theft, according to the San Mateo County District Attorney's Office.

He pleaded not guilty on Tuesday in the courtroom of Judge Kathleen Sherman and was remanded into custody on $950,000 bail.

As the proprietor of the Old Port Lobster Shack in Redwood City, the Lobster Grill in San Jose and the Portola Valley Lobster Shack, Deutsch failed to accurately report the taxable sales at the restaurants over eight years, underpaying taxes to the state amounting to $950,628, prosecutors said.

When investigators served a search warrant at his Portola Valley home, they found more than $600,000 in cash, prosecutors said.

Deutsche opened the Old Port Lobster Shack in 2006 and was working on expanding to two new locations in Sacramento and Roseville, according to the restaurant's website. Deutche was also considering an East Coast expansion in Portland, Maine.

Deutsche is scheduled to return to court for a preliminary hearing on April 4.

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