Sacramento Attorney Sentenced to 2 Years in Prison for Tax Evasion

SACRAMENTO, Calif. — Today, U.S. Chief District Judge Morrison C. England Jr. sentenced James Stewart Richards, 69, of West Sacramento, to two years in prison for tax evasion, United States Attorney Benjamin B. Wagner announced.

According to court documents, Richards is a member of the California and Hawaii bar organizations. Between 1994 and 2003, Richards owed federal income taxes totaling over $170,000, which he did not pay. Instead, he took steps to evade payment of some or all of the taxes he owed. He filed a false “Offer in Compromise” to the IRS that omitted bank accounts and six rental properties. He used a client trust account to hold his own assets. When alerted by the bank that the IRS was making inquiries about the account, Richards called the bank and asked that the bank provide no records to the IRS. He also withdrew $100,000 from the account in the form of cashier’s checks. Richards purchased a yacht that he registered and titled in a nominee’s name in order to conceal that asset from the IRS. He also made false statements about his assets to a bankruptcy court and to the IRS.

Noting that Richards is an attorney who took three semesters of tax courses in law school, Chief Judge England found that Richards employed a “sophisticated scheme” to hide assets from the IRS. Chief Judge England also noted that all attorneys know client trust accounts cannot be in the manner employed by Richards.

This case was the product of an investigation by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Audrey B. Hemesath and Nirav K. Desai prosecuted the case.