A former Ashland restaurant owner found guilty of creating a fake business to avoid taxes will not pay restitution for his crimes, according to federal court documents.

A former Ashland restaurant owner found guilty of creating a fake business to avoid taxes will not pay restitution for his crimes, according to federal court documents.

A Florida federal court could not find evidence that anyone actually lost money from Eugene "Gino" Casternovia's scheme. In fact, Casternovia was convicted on conspiracy charges, which suggests he had not followed through with the alleged scam.

The only money he is obliged to pay is a $200 court fee, according to federal court documents filed Nov. 12.

Casternovia, 62, was one of three men sentenced in federal court in Pensacola, Fla., for helping people set up sham businesses to avoid taxes.

Casternovia's wife, Kathyrn Casternovia, said the judge's refusal to award restitution in this case points toward his innocence.

"There was no money stolen from anyone," she said. "All of (Gino's) clients were made whole."

Kathryn Casternovia said her husband plans to appeal his seven-year sentence. She hopes he will be returned to Oregon should he serve a prison term. "It would be good if he was near his family and friends," she said.

He had faced a possible 25-year sentence and $750,000 in fines for his role in a complicated scheme involving tax fraud, wire fraud and money laundering, attorneys for the U.S. Department of Justice and Internal Revenue Service said.

"That amount of money was completely arbitrary," Kathryn Casternovia said.

On March 31, following a month-long trial in Pensacola, a federal jury returned guilty verdicts against eight people who were involved in promotion of fraudulent schemes through a company known as Pinnacle Quest International, PQI or Quest International.

The government determined that Casternovia and the others presented and sold tax-fraud schemes at trade shows and conferences around the world, including a presentation for 400 people aboard a cruise ship in the Mediterranean in May 2007.

In Casternovia's pre-sentencing hearing Sept. 16, he said he "sold very few PQI memberships, as established through the testimony of Mark Lyon, and was never part of the PQI leadership."

Casternovia was arrested in August 2008. He and his wife have lived in Ashland for more than 25 years and once owned the now-defunct Northlight vegetarian restaurant and the Rainforest Cafe.

Reach reporter Chris Conrad at 541-776-4471 or e-mail cconrad@mailtribune.com.