Los Angeles attorney Milton C. Grimes has entered a guilty plea for tax evasion, a charge that alleges he deliberately avoided paying more than $4 million in income tax over two decades. The admission was made in connection to his 2014 tax obligations, acknowledging he failed to disburse $1,690,922 to the Internal Revenue Service (IRS), as per an official announcement from the U.S. Attorney's Office, Central District of California.
The plea agreement laid out that Grimes neglected to pay federal income taxes from the years 2002 to 2005, skipped the year 2007, the span from 2009 to 2011, and the years 2014 through 2023—an accumulation of $4,071,215 due to the IRS. Moreover, Grimes did not file a 2013 tax return. To actively avoid payment, Grimes is said to have ingeniously but illegally maneuvered his income away from personal bank accounts that the IRS had targeted with over 30 levies since September 2011.
Escalating his evasion tactics from May 2014 to April 2020, Grimes purchased approximately 238 cashier's checks amounting to a remarkable $16 million, which effectively shielded his funds from seizure by the tax authorities, as reported by the U.S. Attorney's Office, Central District of California. He regularly converted client payments into cashier's checks and withdrew cash from his client trust account, the Interest on Lawyers’ Trust Accounts (IOLTA), and his law firm’s bank account, instead of settling his debt with the IRS. Highlighting his scheme, Grimes purchased nine cashier’s checks worth about $1,001,961 on December 5, 2018, just after a corresponding deposit had hit his IOLTA bank account.
In light of his guilty plea, U.S. District Judge Stanley Blumenfeld Jr. has scheduled a sentencing hearing for February 11, 2025, with the potential of up to five years in federal prison awaiting Grimes, according to the U.S. Attorney's Office, Central District of California. Nonetheless, prosecutors have elected to pursue no more than a 22-month prison sentence for Grimes, a leniency that might stem from the plea. The case was thoroughly investigated by IRS Criminal Investigation, and it's being prosecuted by Assistant United States Attorneys Valerie L. Makarewicz, Sarah S. Lee of the Major Frauds Section, and Trial Attorney Sara A. Henderson of the Justice Department’s Tax Division.
