There’s something about escort services and tax evasion. It’s a cash business, of course, and the owners get tempted by the cash. After all, who is going to rat on an escort service?
Well, someone did let the IRS know about Touch of Brazil (aka touchofbrazil.net), a high class Bay Area escort service. Its owner, Cristina Warthen (formerly Cristina Schultz), grossed $133,000 from the service back in 2003. But Mrs. Warthen didn’t file a tax return; instead, she dumped the cash in safety deposit boxes and stores some at her home. The IRS seized $61,171 in 2004. She claims that she formed the escort service to pay off her law school student loans (she has a law degree from Stanford).
Mrs. Warthen settled the prostitution charges that were filed against her but then she was charged with tax evasion. Mrs. Warthen, who married the founder of AskJeeves.com (now ask.com), pleaded guilty today to one count of tax evasion. Under her plea agreement, she’ll pay a $313,133 fine, have home confinement for one year, and two additional years of probation.
With the current economic downturn you may be tempted to form an escort service. If you do, remember to pay your taxes. The IRS is an enemy you don’t want to have.