Convicted in U.S. District Court of Stealing Client Settlement Money, Cheating on Federal Income Taxes
By a MetNews Staff Writer
Philip James Layfield, a disbarred personal-injury attorney, was convicted on Friday by a jury in the U.S. District Court for the Central District of California of 22 felonies based on stealing most of a $3.9 million settlement of a personal injury claim, as well as federal income tax evasion.
After a 13-day trial in the courtroom of Judge Michael W. Fitzgerald, Layfield was found guilty of 19 counts of wire fraud, one count of mail fraud, one count of tax evasion, one count of failure to collect and pay over payroll taxes, and one misdemeanor charge of failure to file a tax return.
Layfield, 48, was remanded into federal custody.
As federal investigators closed in on him in 2017, Layfield fled to Costa Rica in June of that year. Before getting on a flight to that Central American country, Layfield borrowed $700,000 from a business lender by providing misleading information and failing to disclose material information.
He used substantial portions of the loan proceeds for personal expenses, including buying a horse and shipping horses to Costa Rica.
The prosecution began in connection with Layfield having pocketed settlement funds. Josephine Nguyen, a client of Layfield & Barrett (now dissolved), was to receive 60 percent, or $2.3 million, of the $3.9 million settlement of her personal injury claim based on an automobile accident, but received only $25,000.
Charges were expanded in a superseding indictment. They included failure to file a federal income tax return for the tax year 2016, despite receiving more than $3 million, including embezzled client settlement money.
Layfield also caused his law firm to not pay approximately $120,976 in payroll taxes to the United States government for the second quarter of 2017.
Fitzgerald has scheduled a November 8 sentencing hearing, at which time Layfield will face a statutory maximum sentence of more than 200 years in federal prison.
The California Supreme Court disbarred Layfield on Sept. 27, 2018, on recommendation of the State Bar of California. His failed to appear for trial on 12 counts of violations of the Rules of Professional Conduct and the Business and Professions Code resulted in an implied admission of the charges, which the State Bar Court found warranted lifting his license.
The high court, pursuant to the recommendation, ordered that Layfield make restitution as follows:
“(1) Patricia Casas and lssac Cassas in the amount of $359,942.15 plus 10 percent interest per year from March 30, 2017;
“(2) Rodney A. Pimentel in the amount of $742,442.15 plus 10 percent interest per year from June 20, 2017; and
“(3) Josephine Nguyen in the amount of $2,314,942.15 plus 10 percent interest per year from June 20, 2017.”
It is unlikely he will make payment. He and his former law firm are in bankruptcy.
—Essex County Dept of Corrections
This file photo shows Philip James Layfield, a disbarred personal-injury attorney. Layfield was convicted Friday of 22 felonies based on stealing most of a $3.9 million settlement of a personal injury claim.
Early in the State Bar proceedings, Layfield acknowledged moving funds from the attorney-client trust account to his firm’s general fund, but insisted that he thought there was enough money in the coffers to cover the clients’ shares of settlements.
He ascribed blame to others, including the State Bar prosecutor.
Following his indictment here, Layfield was permitted to reside in Delaware, under house arrest, but was allowed to leave the premises to learn to be a truck driver. He subsequently gained employment there in that capacity.
Fitzgerald later permitted him to relocate to Las Vegas.
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