IRS Official Faces Inquiry on Misconduct

The chief of the Internal Revenue Service’s criminal investigation division in Los Angeles is under investigation by superiors after a series of allegations about improper conduct in connection with a bitter, long-running feud between Guess and Jordache, rival blue-jeans makers.

The official acknowledged that the investigation was begun months ago, but he said it was recently stepped up at his request because he feels that it will clear his name.

First reported in the Nov. 16 issue of Forbes magazine, the IRS investigation stems from allegations by the owners of Jordache--three brothers named Nakash--that the four Marciano brothers who pioneered the Guess label have attempted to curry favor with the Los Angeles IRS to harass the Nakashes and other foes.

Ronald Saranow, the official, said in a telephone interview Wednesday evening that, once he learned a couple of weeks ago that Forbes would be publishing a story, he asked that he “be put under investigation so that my name will be cleared.”

“I have confidence that IRS management, when they have all the information, will be supportive of me,” he added.

Ongoing Investigation

The Nakashes and Marcianos have been locked in a legal battle since 1984, soon after the Nakashes bought a 50% stake in Los Angeles-based Guess.

Among the latest allegations are that the Marcianos used their influence with Los Angeles IRS officials to avoid criminal investigations into Guess activities.

“The commissioner (IRS Commissioner Lawrence B. Gibbs) is obviously very concerned,” Ellen Murphy, an IRS spokeswoman in Washington, confirmed Wednesday. “There is an ongoing investigation into those allegations of improper conduct within the Los Angeles office.”

Saranow, a 23-year veteran of the IRS who has spent the last 10 years as chief of the Los Angeles criminal investigation division, is eligible for retirement this month. One factor that undoubtedly will get close scrutiny is a job offer made to Saranow by Guess in March, 1986.

Moreover, Saranow’s former deputy, retired branch chief Howard Emirhanian, worked briefly for Guess as its director of security after his retirement from the IRS last year.

The post was created after a “listening device had been found on Guess premises,” according to Marshall Grossman, an attorney for the Marcianos.

Grossman said there was nothing unusual about officials retiring from government jobs and finding employment in the private sector.