Crime - Sacto 911

Sacramento lawyer to serve prison time for tax evasion

Sacramento attorney James Stewart Richards was sentenced Thursday to two years in federal prison for evading income taxes.

He pleaded guilty in May to one count of evasion. At that time, Richards, 69, owed back taxes for the years 1994 through 2003, plus penalties and interest, totaling $519,438, according to a written plea agreement.

He admitted lying to the Internal Revenue Service in 2001 in order to hide his ownership of six rental properties and two bank accounts. He also admitted utilizing an account in a nominee’s name that held his own assets, from which he withdrew $100,000 in June 2004. The following year, when alerted by the bank that the IRS was making inquiries about the nominee account, he instructed the bank not to give the agency any records and then withdrew another $100,000, Richards acknowledged.

He further admitted that six months later he purchased a yacht for $92,000 and titled it in someone else’s name to conceal it as an asset.

As a matter of course, he handled his money with cashier’s checks from February 2002 to June 2007, hoping they would leave less of a paper trail, Richards confessed.

Assistant Federal Public Defender Michael Petrik Jr. argued on behalf of Richards for probation so he could work and make payments on what he owes the government. Even if he is disbarred in California and Hawaii, the two states where he is licensed to practice law, he could fall back on his know-how as a mechanic to earn money and chip away at the restitution, Petrik said.

But U.S. District Judge Morrison C. England Jr. rejected that course, although the 24 months he imposed on Richards is the bottom of the sentencing guideline range.

Prosecutor Audrey Hemesath sought 27 months, the term recommended by a federal probation officer. They contended the crime was made more egregious by the fact that the evasive tactics employed by Richards required sophistication not possessed by the average taxpayer.

Not so, said Petrik.

“Mr. Richards simply hid money the IRS sought as any taxpayer might have,” the defense attorney insisted.

Denny Walsh: 916-321-1189