A Long Beach man who once worked as a tax and estate-planning lawyer was sentenced today to 60 months behind bars for tax evasion involving shell companies he created to evade payment of more than $1.5 million to the Internal Revenue Service.
James Roy McDaniel, 66, was also ordered by U.S. District Judge S. James Otero to pay restitution of more than $1.5 million to the IRS and serve three years on supervised release following prison, according to the U.S. Attorney’s Office.
McDaniel was a licensed California attorney for more than two decades, until he pleaded guilty in late 2004 to one felony count of subscribing to a false income tax return. In 2005, McDaniel was sentenced to three years in federal prison for that crime, and he surrendered his license to practice law in California. In that case, McDaniel’s failure to report income resulted in a tax loss of $677,368 to the federal government, according to court documents.
The IRS subsequently assessed McDaniel more than $1.4 million in taxes, interest and penalties for the tax years 1997 through 2001, court papers state.
In the current case, McDaniel attempted to evade paying his debt to the IRS by creating two shell companies where he directed payments for tax and estate planning work he performed after being released from prison, according to papers filed in Los Angeles federal court.
During a scheme that ran from May 2008 until December 2012, McDaniel attempted to mislead federal tax authorities and conceal his income by directing other people to sign documents identifying themselves as the sole managing members of the shell companies. As part of the scheme, McDaniel directed them to open bank accounts where he deposited checks for his tax and estate planning work.