West Virginia Attorney Sentenced To Federal Prison Time For Tax Evasion
For Immediate Release
U.S. Attorney's Office, Southern District of West Virginia
Mullins failed to pay more than $389,000 in taxes; defendant also overbilled public defender program by nearly a quarter of a million dollars
BECKLEY, W.Va. – U.S. Attorney Booth Goodwin announced today that West Virginia attorney Charles B. Mullins II was sentenced to 18 months in federal prison for tax evasion. Mullins, 52, of Daniels, Raleigh County, W.Va., previously pleaded guilty in August 2012. Mullins admitted that for years 2006-2009, he failed to pay more than $389,000 in taxes. Mullins also admitted that he owes the state public defender program $223,605 and Alabama-based Daniels Capital Corporation (“DCC”) $184,030 by making false statements concerning the amount of work he did on court-appointed criminal defense work.
U.S. Attorney Booth Goodwin stated, "Lawyers hold a position of public trust. When that trust is broken, the public and the legal profession suffer. It is particularly disappointing when a member of the bar is convicted of wrongdoing. The sentence of the court in this case will hopefully send a clear message that such conduct cannot be tolerated.”
Mullins practiced law in Pineville, Wyoming County, W.Va. Mullins admitted that he deposited money into his client trust account, which included legal fees, reimbursements from settlements for private clients, as well as his personal income. Mullins further admitted that he then wrote checks for his personal use directly from his law office’s client trust account. Mullins admitted that on his federal income tax returns, he did not report as income the money that he used personally from his law office’s trust account. Mullins also admitted that he did not provide the client trust account ledgers to his accountant to aid in the preparation of his taxes. In an effort to conceal the personal expenditures from his trust account, Mullins had employees falsely assign personal expenses to a random client in his trust account computer software program. In the operating account, which he provided to his accountant, Mullins classified personal expenses as business expenses, which were deducted from his income.
Among other types of cases, he represented indigent clients in state criminal matters pending in Wyoming, Mercer and McDowell counties. As a normal practice, after a case was completed, Mullins submitted a payment voucher form to the Circuit Court Judge in the case for approval. The Circuit Court Judge reviewed the payment voucher and signed a court order authorizing payment. Mullins then submitted the court order to the West Virginia Public Defender Services (“WVPDS”) for payment.
Mullins entered into a cash-advance agreement with Daniels Capital Corporation (“DCC”), a corporation headquartered in Birmingham, Alabama, to expedite his payments. In exchange for prompt payments less a small percentage, Mullins assigned his right to full payment from WVPDS to DCC. In essence, Mr. Mullins would fax DCC a form listing the amount ordered by the circuit court, or the amount he expected that the circuit court would order. DCC would wire Mr. Mullins the reimbursement less a percentage that same day or the next day. When WVPDS eventually processed the same payment voucher, WVPDS would pay DCC directly the full amount.
Beginning in March 2005 and at least until June 2011, Mullins submitted false payment vouchers to the WVPDS. Mullins admitted that he inflated the amount of hours he worked on particular cases. Mullins then submitted the vouchers to the Circuit Court, which would in turn submit them to WVPDS by the Clerk of Court.
Mullins also admitted that he submitted false payment vouchers to DCC which represented that he had performed or would perform work on cases and that the court would order payment in a certain amount. Mullins knew that he did not perform such work.
Between March 2005 and June 2011, Mullins reported to WVPDS that he worked more than 24 hours in a single day on numerous occasions, and frequently overbilled WVPDS for work he performed.
Mullins admitted that he owes the WVPDS $223,605. Mullins also agreed he owed Daniels Capital $184,750.85.
The court ordered the defendant to pay restitution in the amount of $780,146.51. The defendant owes $184,030.85 to Daniels Capital Corporation; $223,605 to the West Virginia Public Defenders Services; and $372,510.66 to the IRS.
In a similar matter, former attorney Christopher B. Bledsoe, 33, was sentenced in February 2012 to 18 months in federal prison for wire fraud. Bledsoe admitted to a similar scheme in which he falsified payment vouchers for court-appointed criminal defense work.
The Bledsoe case was brought as part of an investigation by the West Virginia Commission on Special Investigations into false and fraudulent billings submitted by attorneys for services performed in appointed criminal matters.
This case was handled by Assistant United States Attorney Meredith George Thomas and investigated by the Internal Revenue Service and the West Virginia Commission on Special Investigations. The sentence was imposed by United States District Judge Irene C. Berger.
Updated January 7, 2015