Thursday, April 21, 2011
A.G. Harris Asks Court to Jail ‘Tax Lady’ for Contempt of Court
By a MetNews Staff Writer
A Sacramento County lawyer, who advertises herself as the “Tax Lady” and her firm as the “Largest Tax Resolution Firm in the United States,” should be held in contempt of court for shredding documents and failing to refund unearned fees, Attorney General Kamala D. Harris said yesterday.
In papers filed yesterday in Sacramento Superior Court, the attorney general also asked Judge Shelleyanne Chang to freeze Roni Deutch’s assets and appoint a receiver for her firm.
“Deutch showed herself to be a predator for profit, preying on innocent, hard-working people who were simply hoping to settle their accounts with the IRS,” Harris said in her papers. “By defrauding these victims, and then pleading poverty, she created a real danger that her clients will never receive their advance fees back.”
Tad Devlin, a San Francisco lawyer who represents Deutch, declined comment.
Harris’ predecessor, Jerry Brown, sued Deutch in August, seeking $34 million for what the then-attorney general said was a swindle that took money from thousands of individuals seeking to resolve IRS collection problems.
Despite Chang’s order requiring preservation of documents, Harris said in yesterday’s filing, “Deutch has been routinely shredding documents on...almost a weekly basis.” The attorney general estimated that Deutch has shredded between 1.6 million and 2.7 million pages of documents.
The attorney general claims that Deutch’s firm, The Law Offices of Roni M. Deutch, had revenues of at least $25 million a year. The firm spent $3 million a year on advertising, much of it on late-night cable TV, and Deutch herself requently offered tax advice on popular TV shows.
Harris said her office and other agencies received hundreds of complaints from clients claiming they received little or no help after paying up-front fees to the Deutch firm.
In addition to shredding documents, the attorney general also charged that Deutch violated a preliminary injunction issued last November by failing to issue some $435,000 in refunds to her clients within 60 days. Instead she “decided to disperse funds to friends, family and other creditors,” according to the papers filed yesterday.
“By draining her estate and that of the law firm, Deutch has placed her clients at serious risk of never receiving their refunds,” Harris said.
The attorney general alleges that just before last Christmas, Deutch gave her media buyer a $1.1 million mortgage on her home, which only had about $600,000 in equity, to satisfy debts she had incurred in advertising her firm. The house was then sold in February, as a result of which “Inter Media received hundreds of thousands of dollars that could have been used to satisfy Deutch’s obligation to timely provide refunds to her clients.”
Deutch allegedly also personally withdrew $241,000 from the law firm’s accounts and her personal accounts and made more than $21,000 in unnecessary expenditures, including gifts to family and friends, and a payment to a NASCAR racing team.
Copyright 2011, Metropolitan News Company