Los Angeles Attorney Charged with Tax Evasion and Willful Failure to Pay Taxes

 

A federal grand jury in Los Angeles indicted a California attorney with attempting to evade payment of his individual income taxes and willful failure to pay taxes.

According to the indictment, Milton C. Grimes, an attorney in Los Angeles, owed the IRS more than $1.7 million in taxes for tax years 2010 and 2014. The IRS allegedly tried to collect the unpaid taxes from Grimes by, among other things, levying his bank accounts. In response to the IRS’ collection efforts, from 2014 through 2020, Grimes allegedly engaged in a scheme to thwart the IRS’ levies by keeping his personal bank account balances low by routinely purchasing cashier’s checks and withdrawing cash from his business bank accounts, often immediately after depositing funds to his business bank accounts, thereby avoiding funding his personal accounts. Grimes allegedly withdrew approximately $16 million in funds from the accounts in cashier’s checks during those years.

In addition, Grimes allegedly filed individual income tax returns for tax years 2018 through 2021 reporting that he owed approximately $700,000 in taxes. Grimes allegedly did not, and has not, paid the taxes that he self-reported he owes.

In total, Grimes is alleged to have caused a tax loss of approximately $2,418,050 to the IRS.

If convicted, Grimes faces up to five years in prison for the tax evasion count and up to one year in prison for each count of willful failure to pay taxes. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Martin Estrada for the Central District of California made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorney Sara Henderson of the Justice Department’s Tax Division and Assistant U.S. Attorney Valerie Makarewicz for the Central District of California are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.