DEBRA W. YANG
United States Attorney
Central District of California
Thom Mrozek, Public Affairs Officer
(213) 894-6947
thom.mrozek@usdoj.gov
September 29, 2003
BEVERLY HILLS TAX LAWYER SENTENCED TO 32 MONTHS FOR CONVICTION ON FEDERAL CONSPIRACY, TAX CHARGE
A tax lawyer who helped clients evade the payment of more than $12 million in income taxes was sentenced today to 32 months in prison for conspiring to commit bankruptcy fraud and aiding and abetting tax evasion.
Jeffrey A. Sherman, 42, formerly of Beverly Hills and now a resident of Westwood, was a principal of the Sherman & Sherman law firm in Century City. He was also the founder of Tax Consulting Group, Inc., also located in Century City, which specialized in pre-bankruptcy tax planning. Before entering private practice, Sherman was a trial attorney in the IRS Office of District Counsel from 1986 through 1990. Sherman resigned from the California State Bar after being suspended in 2002.
Sherman pleaded guilty to one count of conspiracy and one count of aiding and abetting tax evasion in February 2001. The charges arose from Sherman's participation in an elaborate scheme in which he and another lawyer, former Southwestern School of Law professor Robert V. Beaudry, helped clients hide their wealth and then discharge the taxes they owed to the IRS and the State of California in fraudulent bankruptcies. Two of the clients - John and Letantia Bussell, both Beverly Hills medical doctors - used a number of corporations set up by Sherman and Beaudry to hide their ownership of valuable assets, including a farm in San Diego County, approximately $1 million in cash and a condo in Park City, Utah. Using the nominee corporations set up by Sherman and Beaudry, the Bussells falsely told the bankruptcy court in 1995 that they had no disposable assets. These false statements and the concealment of their assets enabled the Bussells to fraudulently discharge more than $4 million worth of liabilities, including a debt to the IRS that exceeded $1 million. The web of nominee corporations used by Sherman to hide the Bussells' assets was intricate, involving more than a dozen nominee companies and numerous bank accounts in the Cayman Islands and Switzerland.
One year ago, Letantia Bussell was sentenced to three years in federal prison and was ordered to pay $2.4 million in restitution after a jury convicted her of conspiracy, bankruptcy fraud and tax evasion. John Bussell died while the jury was deliberating the charges pending against him.
Beaudry, who also pleaded guilty to tax charges, is scheduled to be sentenced on December 8.
Sherman’s sentence also reflected his involvement in a similar scheme involving another client, Robert A. Grant, who is a retired orthopedic surgeon from Agoura Hills. Sherman helped Grant conceal approximately $5 million in cash and valuable real estate so Grant could discharge a tax debt owed to the IRS that totaled more than $11 million. Sherman was named as a coconspirator in a 23-count indictment that a federal grand jury handed down against Grant in August 2002. In June, Grant pleaded guilty to money laundering, and he is scheduled to be sentenced on November 10.
Sherman was sentenced today by United States District Judge Alicemarie Stotler, who also ordered the defendant to pay $598,381 in restitution to the victims of the bankruptcy fraud.
These cases were a product of a joint investigation by IRS-Criminal Investigation and the Federal Bureau of Investigation.
Release No. 03-134
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