Taxable Talk

Civil rights attorney Stephen Yagman was sentenced today to three years at ClubFed for his 19 convictions on bankruptcy fraud, tax fraud, and money laundering. The government had asked for nine years; Yagman had asked to teach a course on morals at UCLA.

Yagman admitted today in testimony that “he got sloppy…I was aware that I had painted a target on my own back and I tried to be scrupulously careful. I made mistakes.”

Assistant US Attorney Alka Sagar told the Court on Monday, “He went shopping on Park Avenue hours after his bankruptcy was filed. This was brazen conduct.”

Judge Stephen Wilson noted, “Like so many cases in modern history, it’s always the cover-up that’s worse than the crime. Frankly, I was shocked by his testimony because it was transparently untrue in many areas.”

Yagman will appeal his conviction. He must surrender to authorities on January 15th.

News Story: San Jose Mercury News (via AP)

The sun’ll come out
Tomorrow
So ya gotta hang on
‘Til tomorrow
Come what may
Tomorrow! Tomorrow!
I love ya Tomorrow!
You’re always
A day
A way!

Those lyrics, from the musical Annie, describe Stephen Yagman’s fate. After a six-hour sentencing hearing today in Los Angeles, the attorney still does not know his fate. He was convicted earlier this year on 19 counts of tax fraud, bankruptcy fraud, and money laundering.

As I noted over the weekend, Yagman would like to teach morals at UCLA. The Department of Justice would like him to visit ClubFed for nine to eleven years.

The news report noted that Judge Stephen Wilson asked, “How do you reconcile his desire to continue to practice in one of the most stressful areas with his medical condition?” Yagman’s attorney said that Yagman has been suffering from heart disease.

Yagman’s fate will probably be set by the judge tomorrow. I suspect a visit to ClubFed is much more likely than an immediate trip to Westwood. As Chuck Gallagher, a business ethics speaker (and a former ClubFed resident for tax evasion) said, “Yagman has shown from his conviction that he has a disregard for the law through his actions related to hiding assets in bankruptcy and from the IRS (tax evasion). Hence, it would be far reaching to think that the government would consider him a likely candidate to teach morality.”

Back in June prominent Los Angeles attorney Stephen Yagman was found guilty of 19 counts of tax fraud, money laundering, and bankruptcy fraud. Yesterday at the sentencing hearing, Yagman’s attorney, Barry Tarlow, asked that Yagman be sentenced to teaching morality to undergraduates at UCLA.

I’m not making this up.

UCLA professor Frances Olsen asked Yagman to teach the course. Ms. Olsen, according to her biography, specializes in “legal theory, social change, and feminism.” The Wikipedia page on Ms. Olsen states that she is “…a noted member of the school of Feminist Legal Theory.” Apparently ethics aren’t part of that theory.

For the record, I’ll note that Mr. Tarlow believes that the prosecution of Mr. Yagman was a “vindictive prosecution.” And that Mr. Tarlow believes prison would be a bad choice for some other reasons: bad health and possibility of being attacked. Vindictive or not, when a person is convicted of 19 felonies he should expect to visit ClubFed rather than teach at UCLA.

Judge Stephen Wilson will likely sentence Mr. Yagman on Monday.

Hat Tip: Patterico’s Pontifications

The LA Weekly has a great article on the Stephen Yagman case. As I wrote earlier, Mr. Yagman was found guilty on 19 counts of tax evasion, money laundering, and bankruptcy fraud last week.

If you read the Los Angeles Times article on the case, you might have gotten the impression that Yagman was prosecuted because of his past actions against the government. The LA Weekly article ends that myth.

You can read the LA Weekly article here.

Besides Mr. Yagman, several other individuals found their tax evading days ended. We also have a story detailing potential tax problems for a Los Angeles politician’s wife.

We have two from the high tech world. From suburban Pittsburgh comes Pradeep Kumar Walia. Mr. Walia is the former CEO of Atlas Software. Back in 1999, he reported $231,000 of income and paid $65,500 in tax. The problem? His actual tax was about $10,000 more. Oops. Mr. Walia pleaded guilty and will receive probation plus will have to make restitution.

Last year I reported on the saga of the CEO of VaporTech. John Frances Griffin pleaded guilty to two counts of tax evasion last week, and has agreed to forfeit $75,000 worth of personal items. He’s facing a term at ClubFed for his evading tax on $1.1 million of income, plus a likely fine.

>From Providence, Rhode Island, comes the story of an entrepreneur who outdid Mr. Griffin. Neil Stierhoff ran a mail-order electronics business. It was apparently doing quite well, especially as his net after taxes was close to his net before taxes. Of course, that was due to Mr. Stierhoff not paying taxes on $1.2 million of income through allegedly using aliases and cash. He was found guilty last week, and based on federal sentencing guidelines, is looking at about four years at ClubFed.

Moving to Enid, Oklahoma, we get the story of a bookkeeper who created her own W-2 form. That might be all right, if it was accurate, but she missed just a bit of her income. Actually, it might be more appropriate to say that her W-2 recorded just a bit of her income. She, too, pleaded guilty, and Margaret Renee Schram is looking at five years at ClubFed plus restitution of $270,000 to her ex-employer and restitution to the IRS.

Finally, this last story highlights the perils of public office. Rocky Delgadillo is the Los Angeles City Attorney. Recently, his wife has been accused of driving Mr. Delgadillo’s city-provided SUV. Adding an insult to the alleged injury, the Los Angeles Times reported yesterday that Mrs. Delgadillo failed to file California income tax returns for her business and didn’t obtain a Los
Angeles city business license. She has also been accused of having city employees baby-sit her sons during normal business hours. As a hint to any aspiring politicians, I strongly suggest you pay all of your taxes and ensure that all of your businesses have all appropriate licenses. You can be sure that your opponents will check public records in these days of public records being on the Internet.

So a little evasion resulted in probation, but some substantial evasion got time at ClubFed. It’s a lot easier not to evade in the first place, but that temptation is just hard to resist for some.

Civil rights attorney Stephen Yagman was found guilty on 19 counts of tax evasion, money laundering, and bankruptcy fraud on Friday in Los Angeles. Yagman will be sentenced on September 24th.

Yagman was a considered combative civil rights attorney, and fought many battles with the Los Angeles Police Department and other agencies. Yagman claimed during his trial that he was “targeted” because of his history of fighting US law enforcement agencies. However, it may have been his non-payment of taxes that caused him to be targeted. Yagman, after filing for bankruptcy, had a lavish dinner and bought expensive shoes. That didn’t sit well with the jury.

Yagman is looking at spending a few years at ClubFed.

News Story: Los Angeles Times

Prior coverage: Here and Here

Civil rights attorney Stephen Yagman has been indicted on tax evasion, fraud, and money laundering charges. The charges stem from Yagman not paying all the tax he owed in the mid-1990s and accruing significant interest charges and penalties. Additionally, he is also charged with not paying payroll taxes owed by his law firm, Yagman & Yagman P.C. (Thanks to the TaxProf Blog for the hat tip.)

Also potentially in trouble is Grover Norquist, head of Americans for Tax Reform. A story in the Washington Post indicates that disgraced lobbyist Jack Abramoff sent cash for lobbying through Americans for Tax Reform. The article states, “as the money passed through, Norquist’s organization kept a small cut, e-mails show.”

While I’m not an attorney, this certainly sounds like a potential conspiracy charge. As Roth Tax Updates notes, “ATR and Mr. Norquist may be vulnerable to some serious problems with the IRS.” I think that’s an understatement. (Thanks to Roth Tax Updates for the hat tip.)

News Story:

Yagman Indictment (Los Angeles Times)