Local Physician Convicted of Eight Counts of Tax Evasion After Earning Over $1 Million

For Further Information, Contact: Assistant U.S. Attorneys Joseph J.M. Orabona (619)546-7951 and Melanie Pierson (619) 546-7976

NEWS RELEASE SUMMARY – January 28, 2016

SAN DIEGO – A federal jury today convicted Dr. William Bailey, a local physician of osteopathic medicine, on eight counts of tax evasion.

According to evidence presented at trial, between 2004 and 2011 Bailey earned over $1.1 million in compensation for his services as a physician at two different local clinics and paid no taxes. Bailey concealed his income by having his paychecks directed to an account in the name of a trust.

In his own testimony at trial, Bailey admitted that he cut and pasted other documents to create the trust himself and signed the name of another person as the creator of the trust. As the grantor, sole trustee and also the beneficiary of the so-called trust, the income was attributed to Bailey as an individual.

Bailey spent the $1.1 million he deposited in the trust account to pay his personal expenses, including the purchase of a home, two cars, a time share and approximately $400,000 in credit card bills. Despite earning a significant income, Bailey reported no taxable income on the tax returns he filed. Evidence presented at trial showed that Bailey owed a total of $315,000 in unpaid taxes for the period from 2004-2011.

“As today’s verdict shows, the law is clear on the issue of taxable income and who is required to file and pay taxes—there is no gray area on the subject,” said Special Agent in Charge Erick Martinez for IRS Criminal Investigation. “With filing season upon us, let this conviction serve as a warning to those who are considering similar conduct.”

Bailey is scheduled to be sentenced on April 20, 2016, at 9:00 a.m., before U.S. District Judge Cathy A. Bencivengo.

DEFENDANT                                  Criminal Case No. 13CR3046-CAB

William Richard Bailey                       Age: 57                       San Diego, California

SUMMARY OF CHARGES

Title 26, United States Code, Section 7201 B Tax Evasion

Maximum Penalties: 5 years of imprisonment and $250,000 fine per count

AGENCY

Internal Revenue Service-Criminal Investigations