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Criminal Corner

Former Cedars-Sinai Employee Sentenced on Grand Theft, State Income Tax Charges

June 15, 2009, a former Cedars-Sinai employee was sentenced to four years and eight months in state prison on felony charges of grand theft, insurance fraud, identity theft, and two counts of state income tax evasion, we announced.

James A. Wilson, 41, 45, or 46, obtained multiple California driver’s licenses using different names and dates of birth. According to court documents, between 2003 – 2007, Wilson abused his position of trust in the billing department and embezzled more than $300,000 by stealing patients’ identifying information and submitting fraudulent claims for services that were never provided. The Los Angeles Unified School District (LAUSD), whose employees were affected by this fraud, paid workers' compensation claims based on Wilson’s fraudulent billings. In addition, Wilson failed to claim this illegal income on his state income tax returns. All income is taxable, including income from illegal sources.

Wilson was also ordered to pay restitution of $354,000 to LAUSD and $62,000 to us representing the unpaid tax, penalties, interest, and the cost of the investigation.

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.

Los Angeles County Superior Court Judge Samuel Mayerson handed down the sentence in Department 44 of the Clara Shortridge Foltz Criminal Justice Center. Los Angeles County Deputy District Attorney Wendy Derzaph of the Fraud Interdiction Program prosecuted the case. This was a joint investigation between the Los Angeles County District Attorney’s Office and us.

Back to July 2009 Tax News