Businessman James Pflueger's automobile dealerships and related companies are the target of an IRS criminal tax probe that began last year and is still under way, according to legal papers filed in state court this week by lawyers for Pflueger Inc.

James Pflueger is already the subject of criminal and civil trials in state court on Kaua'i related to the Kaloko dam collapse on March 14, 2006, that killed seven people.

The IRS probe is apparently unrelated to the dam collapse and is centered on tax filings of the Pflueger family of automotive companies, according to a lawsuit filed by Pflueger Inc. against the company's insurance carriers.

The suit seeks to require the insurance firms to cover legal costs incurred during the criminal investigation.

In May 2008, a federal grand jury subpoena was served on Pflueger Inc. for "production of certain records including, but not limited to, all corporate bookkeeping records, savings account records, checking account records and loan records," said the suit, filed by attorney Lyle Hosoda.

Pflueger Inc. chief financial officer Randall Kurata then made a claim to the firm's insurance carriers for payment of legal expenses, but was told that "the grand jury proceeding investigating Pflueger was not a covered claim" under the insurance policies, the suit said.

"Since that time, additional grand jury subpoenas have been issued to Pflueger, witnesses have been interviewed" and "the grand jury proceeding continues," the suit said.

Hosoda said yesterday that "Pflueger Inc. has and intends to continue to cooperate fully" with the investigation.

"We do not believe there has been any any criminal wrongdoing," he said.

Attached to the suit is a Feb. 11, 2009, letter from another attorney, Joachim Cox, seeking reimbursement of legal expenses under an "executive liability" policy purchased by Pflueger Inc. from AIG Technical Services Inc.

Cox said he represented Pflueger Inc. and Kurata in grand jury proceedings related to "tax filings between the years 2000-2008."

Attached to that letter were numerous grand jury subpoenas, issued by assistant U.S. attorney Clare Connors, for business records held by Pflueger Inc. and related firms, including Pacific Auto Distributors, Pflueger Properties, Pflueger Acura, J.P Automotive, Rad Pacific Partners and Fearless Motorsports.

Another subpoena, to General Motors Corp., demanded documents related to the award of dealerships to Pflueger firms for such makes as Cadillac, Hummer, Buick and GMC.

Some of the subpoenas seek records related to financial transactions between the companies and its executives, including James Pflueger, his son Charles Alan Pflueger and other family members.

James Pflueger is identified in state business records as board chairman of Pflueger Inc., and Alan Pflueger as its chief executive.

William McCorristion, who represents Pflueger in the Kaloko dam proceedings, would not comment on the IRS probe.

Connors would not comment, as did IRS agent Greg Miki, identified on the subpoenas as the criminal investigator handling the case.