Stephen Yagman Convicted of Felony Tax Evasion

Monday, June 25, 2007

Page 1

Stephen Yagman Convicted of Felony Tax Evasion

By TINA BAY, Staff Writer

Venice civil rights attorney Stephen Yagman has been found guilty of attempting to evade the payment of over $100,000 in federal income taxes by concealing his assets and committing bankruptcy fraud.

Following a five-week trial in the U.S. District Court for the Central District of California, a Los Angeles jury on Friday convicted Yagman on 19 felony counts—one count of tax evasion, one count of bankruptcy fraud and 17 counts of money laundering.

Yagman, 62, will remain free on supervised bail in the amount of $100,000 bail until his scheduled Sept. 24 sentencing before U.S. District Judge Stephen V. Wilson.

Response to Verdict

Assistant U.S. Attorney Beong-Soo Kim, who prosecuted the case along with Assistant U.S. Attorney Alka Sagar, told the MetNews his office was pleased with the jury verdicts finding Yagman guilty on all counts.

“We believe the verdict reflects the strength of the evidence that was presented over the five-week trial,” he said.

In a statement, Internal Revenue Service Special-Agent-in-Charge Debra King said the verdict sent “a powerful message” that acts of deception and illegal conduct such as Yagman’s “will not be tolerated.”

“The public expects attorneys to be honest, to be trustworthy and to show respect for the law,” she remarked.

Yagman’s defense attorney, West Hollywood practitioner Barry Tarlow, did not return a MetNews phone call.

In an indictment last June, Yagman was accused of owing the U.S. government more than $158,000 in tax liabilities, with interest and penalties, accumulated over the course of four years.

It was alleged that he used various bank accounts held in the name of his girlfriend to deposit his own money, including around $776,000 transferred to him by his relatives, and to conduct his own personal financial affairs.

Yagman was also charged with making fraudulent statements in personal and corporate bankruptcy cases he filed in 1999, allegedly to further impede IRS efforts to collect. He failed to disclose that he lived in a 2,800-square foot house near Venice Beach for which he made the mortgage payments and paid property taxes, and for which he deducted mortgage interest on his tax returns.

Alleged Non-Disclosures

Additionally, the attorney was accused of failing to disclose various personal and brokerage accounts which he controlled but were in his girlfriend’s name, and the receipt of hundreds of thousands of dollars in legal settlements, client payments and attorneys fees that he received in 1999 and 2000.

Yagman offered a plea of “presumed innocent” to the charges last July and stated at his plea hearing that the accusations were “politically motivated” and “retaliatory.” Over his career, Yagman has become a nationally known lawyer for citizens claiming civil rights violations by the police.

The government’s evidence at trial included documentation that Yagman filed federal income tax returns for the tax years 1994 through 1997, but paid only a small portion of the taxes owed to the IRS. There was also evidence that he failed to pay significant amounts of federal payroll taxes owed by his law firm, then called Yagman & Yagman, and now Yagman & Yagman & Reichmann & Bloomfield.

The case against Yagman stems from an investigation by the IRS, the U.S. Postal Inspection Service and the Federal Bureau of Investigation.

A New York native, Yagman was admitted to the State Bar in 1976 and was disciplined with actual suspension in 1989 and 1998.

He has represented clients in litigation over conditions at the military detention camp for alleged terrorists at Guantanamo Bay, the shooting of anti-government radicals by federal agents at Ruby Ridge in Idaho, and the anti-immigration initiative, Proposition 187.