Los Angeles attorney pleads guilty to federal charge for willfully evading payment of over $4 million in income tax over two decades

Date: Oct. 29, 2023

Contact: [email protected]

LOS ANGELES - Milton C. Grimes, a long-time Los Angeles lawyer, pleaded guilty today to evading the payment of more than $4 million in federal taxes over a 21-year period.

Grimes pleaded guilty to one count of tax evasion relating to his 2014 taxes, admitting that he failed to pay $1,690,922 to the IRS.

According to his plea agreement, Grimes did not pay federal income taxes due for 23 years, 2002 through 2005, 2007, 2009 through 2011, and 2014 through 2023 - a total of $4,071,215 owed to the IRS. Grimes also admitted he did not file a 2013 tax return with the IRS.

From at least September 2011, the IRS attempted to collect Grimes' taxes by issuing more than 30 levies on his personal bank accounts. However, from at least May 2014 to April 2020, Grimes willfully evaded the payment of the outstanding income tax owed to the IRS by not depositing income he earned from his clients into his personal bank accounts that were subject to levy.

Instead, Grimes purchased approximately 238 cashier's checks totaling $16 million to keep the money out of the reach of the IRS. Grimes would routinely purchase cashier's checks and withdraw cash from his client trust account, his Interest on Lawyers' Trust Accounts (IOLTA), and his law firm's bank account, rather than pay the IRS.

For example, on December 5, 2018, Grimes purchased nine cashier's checks worth approximately $1,001,961, following the deposit of the same amount and on the same date into his IOLTA bank account.

United States District Judge Stanley Blumenfeld Jr. scheduled a February 11, 2025, sentencing hearing, at which time Grimes will face a statutory maximum sentence of five years in federal prison. Prosecutors have agreed to seek a prison sentence of no more than 22 months for Grimes.

IRS Criminal Investigation (IRS-CI) investigated this matter.

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

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.