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April 2009 - Former Vice President of Finance Pleads Guilty to Grand Theft, False State Income Tax Returns

A Chatsworth man pleaded guilty to one felony count of grand theft and one felony count of filing a false state income tax return.

James I. Ha, 35, was employed as the vice president of finance for a local marketing company. According to court documents, Ha abused his position of trust by embezzling more than $350,000 from 2001 – 2004. In addition, Ha also failed to claim this money on his state income tax returns for the same years. All income is taxable including income from illegal sources. Ha used the embezzled funds for personal expenses.

Sentencing is delayed until April 2010, to give Ha time to pay restitution to his former employer and pay FTB more than $45,000 representing the unpaid tax, penalties, interest, and the cost of the investigation. Ha faces up to three years in state prison and five years of formal probation.

Failing to report all income is part of the $6.5 billion tax gap California faces each year. The tax gap is defined as the difference between the tax that is owed and the tax that is paid. Since January, FTB has cooperated with local district attorneys around the state on six successful prosecutions.

Los Angeles County Superior Court Judge Marcelita V. Haynes presided over the case and Los Angeles County Deputy District Attorney Reid Rose prosecuted the case. This was a joint investigation between the Los Angeles County Police Department, the Los Angeles County District Attorney’s Office, and us.

Restitution Ordered in Identity Theft, Online Auction House Scam

A Brentwood man was ordered to pay more than $187,000 restitution to the State of California after previously pleading guilty to state income tax evasion.

Charles Merritt-Osborne is currently serving an eight-year prison term after pleading guilty in June 2008. Merritt-Osborne was the alleged ringleader of a scheme where stolen identities were used to create fraudulent companies, which then obtained credit to purchase goods for resale on eBay. The scam netted more than $2 million.

Two felony counts of state income tax evasion were among the charges to which Merritt-Osborne pleaded guilty. An exact amount of restitution was not determined at sentencing, so the hearing ordered full restitution in the amount of $187,191 which represents the unpaid tax, penalties, interest, and the cost of the investigation. All income is taxable including income from illegal sources. The failure to file tax returns is part of the $6.5 billion tax gap California faces each year. The tax gap is defined as the difference between the tax that is owed and the tax that is paid.

Santa Clara Superior Court Judge David A. Cena ordered the restitution in Department 31 of the Hall of Justice. Assistant Attorney General Ralph Savilla with the Office of the Attorney General prosecuted the case. The fraud was discovered by the state’s high tech crime task force.