March 24, 2024 – LOS ANGELES – A federal grand jury has indicted Los Angeles attorney Milton C. Grimes with the evasion of payment of his individual income taxes and willful failure to pay taxes, the Justice Department announced on Friday.

The indictment filed Thursday afternoon charges Grimes with one count of attempted tax evasion and four counts of willful failure to pay taxes. He is expected to be arraigned in United States District Court on April 10.

According to the indictment, Grimes owed the IRS more than $1.7 million in taxes for tax years 2010 and 2014. The IRS tried to collect the unpaid taxes from Grimes by, among other things, levying his personal bank accounts. In response to IRS collection efforts, from 2014 through 2020, Grimes allegedly engaged in a scheme to thwart the tax levies by keeping his personal bank account balances low. Grimes deposited the money he earned from representing clients into his law firm’s business bank accounts, and then he routinely purchased cashier’s checks and withdrew cash from those business bank accounts, the indictment states. By not depositing income earned into his personal accounts, Grimes allegedly avoided IRS collection efforts. With this scheme, Grimes allegedly withdrew approximately $16 million in funds from the business accounts in cashier’s checks during those years, rather than paying the amount owed to the IRS.

Grimes also allegedly filed individual income tax returns for tax years 2018 through 2021 reporting that he owed approximately $700,000 in taxes. Grimes allegedly did not, and has not, paid the taxes that he self-reported he owes.

In total, Grimes is alleged to have caused a tax loss of approximately $2,418,050 to the IRS.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

If convicted, Grimes faces up to five years in prison for the tax evasion count and up to one year in prison for each count of willful failure to pay taxes. A federal district court judge will determine any sentence after considering the United States Sentencing Guidelines and other statutory factors.

IRS Criminal Investigation is investigating this matter.

Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section and Trial Attorney Sara A. Henderson of the Justice Department’s Tax Division are prosecuting the case.

Source: DOJ Release