to 3 years in federal tax case; vows to appeal

BY GARY WALKER

Five months after being convicted in federal court on multiple tax violations, Venice civil rights attorney Stephen Yagman was sentenced to three years in federal prison Tuesday, November 27th, in U.S. District Court in Los Angeles.

The United States Attorney’s Office, which prosecuted the case, had pushed for a jail term of nine years in prison.

“In this case, in my view, justice was done,” said U.S. District Judge Stephen F. Wilson after pronouncing sentence. “The jury was right.”

United States attorney Thomas P. O’Brien said, “As an attorney, Mr. Yagman had a duty to play by the rules. He failed to live up to this responsibility, and now he is a convicted felon. Mr. Yagman attempted to compromise the integrity of our tax system and the bankruptcy courts, and for this he will spend the next several years of his life behind bars.”

Wilson dismissed six of the money laundering counts the government had filed against Yagman.

The civil rights lawyer, who forged a successful career winning civil verdicts against various local law enforcement agencies, was convicted June 22nd on 19 felony counts, including one count of attempting to evade the payment of taxes, one count of bankruptcy fraud and 17 counts of money laundering.

In an exclusive interview with The Argonaut, Yagman vowed to appeal his conviction. Erwin Chemerinsky, the newly appointed dean of the University of California, Irvine and a well-known professor of constitutional law, will join Yagman’s trial attorney, Barry Tarlow, in appealing the sentence.

“I feel very strongly that there are viable appellate issues on which we can appeal,” Yagman told The Argonaut during the interview, days after the sentence was handed down. One area that could be examined would be what Tarlow called at trial a “vindictive and retaliatory prosecution” due to his client’s history of challenging law enforcement.

“That and many other issues will be looked at,” Yagman asserted. “They haven’t specifically been decided upon yet because we still have to read the trial transcript.”

Two of the civil rights veteran’s most publicized trials were actions against the federal government. In 2001, Yagman was appointed as a special prosecutor in the Ruby Ridge case, in which he prosecuted a Federal Bureau of Investigation agent who was on trial for killing the wife of white supremacist Randy Weaver.

In 2002, Yagman filed the first two federal lawsuits against the government which challenged the Bush administration’s policy on detaining prisoners at Guant·namo Bay. Yagman won the latter case, which granted prisoners habeas corpus, or access to the federal courts to contest their detentions.

Yagman said he was not surprised that the government had brought the tax case against him.

“I have always believed that I had painted a target on my own back due to the types of cases that I handled, and that heavy artillery would be used,” he said.

The U.S. Attorney’s Office dismissed the notion of retaliatory prosecution.

“We, of course, vehemently deny that this case is motivated by political retribution or any other improper motive,” spokesman Thom Mrozek said.

During the four-week trial, prosecutors presented evidence that Yagman filed federal income tax returns for the tax years 1994 through 1997, but paid only a small portion of the taxes owed to the Internal Revenue Service. As a result of the underpayment, prosecutors alleged that Yagman accumulated federal income tax liabilities for those four years that totaled more than $158,000, including interest and penalties.

The defendant was also accused of transferring assets from his law company, Yagman & Yagman, P.C. to a new law firm, Yagman, Yagman & Reichmann, in an attempt to avoid paying back federal payroll taxes, according to government lawyers.

The U.S. Attorney’s Office accused Yagman of engaging in a scheme to conceal his assets and to impede the collection efforts of the Internal Revenue Service (IRS), saying that during this time, he deposited hundreds of thousands of dollars into various bank and brokerage accounts in his girlfriend’s name to disguise his personal assets. Yagman used the accounts to pay for personal purchases and to conduct the majority of his personal financial transactions, government lawyers stated.

Prosecutors say that in his personal bankruptcy petition, Yagman failed to disclose to the bankruptcy court that he lived in a 2,800-square-foot house near the beach in Venice, for which he made mortgage and property tax payments, as well as claiming the homeowner’s mortgage interest deduction on his tax returns. Yagman’s girlfriend was listed as the owner of the property, and prosecutors claim that although her name was also on several of the bank accounts, Yagman controlled them.

During the trial, Tarlow asserted that his client put the Venice home and various accounts in his girlfriend’s name to prove his dedication to her after she moved from Orange County to be with him.

“Mr. Yagman’s sentencing sends a clear message to the public that those who disregard their privilege to practice law and use deceitful and dishonest means for their own financial benefit will be fully prosecuted,” said Debra King, IRS special agent in charge.

While the U.S. attorney had hoped for the nine-year term that had been requested, “We think that the three-year sentence fulfills the need for justice in this case,” said Mrozek.

Yagman took umbrage with that contention, questioning the logic of asking for a larger sentence and then accepting a much lesser term.

“It seems to be a little hypocritical to ask for a nine-year sentence and then say that you’re satisfied with three years,” he said.

Leslie Dutton, an Emmy-winning producer of the Marina del Rey-based cable television show Full Disclosure told The Argonaut that she had spoken with several people in legal circles — whom she did not name — who were taken aback by Yagman’s sentence of three years.

“There seems to be a great deal of surprise,” said Dutton, who interviewed Yagman on her show in 2001.

Yagman won civil verdicts against several law enforcement agencies, including the Los Angeles Police Department, during a colorful and at times controversial 30-plus-year career.

In 1992, he won a lawsuit against the Los Angeles Police Department (LAPD) Special Investigations Section after the unit’s officers shot and killed three men who had held up a McDonald’s in Sunland, referring to the unit as a “death squad.”

An agent of a special unit claimed that one of the men had a gun when he was shot, but a pathologist determined that he could not have been holding a gun at the time that he was shot.

“[Yagman] was a very unique man,” Dutton recalled. “He made some very controversial statements, which made for great television.

“He was one of the most remarkable people that I have ever interviewed.”

The Ruby Ridge and Guant·namo Bay cases were two that Yagman mentioned as high on his list of cases in which he feels a great impact was made.

“Those are the two that stick out in my mind because they had implications beyond the local area,” Yagman said.

Closer to home, Yagman feels he had played a key role in trying to reform the LAPD. “To some extent, I believe that I was successful in that,” he stated.

Despite his conviction, the combative civil rights litigator still holds the judicial system in esteem.

“The American system of justice is the best system of justice that has ever existed,” said Yagman. “It has its flaws, and the flaws generally are greatly outweighed by the benefit of having common folk sit in judgment on people who have claims and people who want to defend against those claims.

“And that has always been a terrific idea.”

Currently free pending his appeal and preparing to try a federal case on December 14th, Yagman was philosophical about his immediate future, with a jail term looming over the horizon.

“[The conviction] puts a crimp in what I’ll be doing for a while, but that’s life,” he concluded.

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