California Attorney Indicted for Tax Evasion and Failure to Pay Taxes

A federal grand jury in Los Angeles has indicted California attorney Milton C. Grimes on charges of attempting to evade payment of individual income taxes and willful failure to pay taxes. The indictment alleges Grimes owed the IRS over $1.7 million in taxes for 2010 and 2014.

Alleged Scheme to Evade Taxes:

According to the indictment, Grimes used a scheme to evade IRS collection efforts by keeping his bank account balances low. 

This involved purchasing cashier’s checks and withdrawing cash from his business accounts immediately after depositing funds, thereby avoiding funding his accounts. Over the years, Grimes allegedly withdrew around $16 million in cashier’s checks to thwart IRS levies.

Grimes purportedly filed individual income tax returns for 2018 through 2021, reporting approximately $700,000 in taxes owed. However, he allegedly failed to pay these reported taxes, leading to a total tax loss of approximately $2,418,050 to the IRS.

Potential Penalties:

If convicted, Grimes could face up to five years in prison for tax evasion and up to one year for each count of willful failure to pay taxes. 

A federal district court judge will make the sentencing decision, taking into account various factors, including the U.S. Sentencing Guidelines.

Announcement and Investigation:

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 announced the indictment. IRS Criminal Investigation is actively investigating the case.

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