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Los Angeles Stanford Law Grad Pleads Guilty to Tax Evasion for For Failing to Declare Escort Money

A Los Angeles woman plead guilty to tax evasion after denying and shifting blame for 5 years with Federal prosecutors. Cristina Warthen, 35, admitted she failed to pay income tax on money she earned while running an escort service while she was attending Standford Law School.

She will be sentenced in June, however, it has already been determined that she will pay the IRS over $300,000 and could face a fine that could be as high as $100,000. She will also be ordered to spend one year on home confinement and three years of probation. It is clear that her Los Angeles white collar defense attorney was top notch. If she had been convicted of all of the charges, she could have served many years in Federal prison. Now she will be ordered to send a year in home confinement in a home she shares with her husband, and Ask.com founder, David Warthen.

Because she was being charged with a Los Angeles white collar crime, asset forfeiture laws were triggered at the time law enforcement found substantial cash hidden in her residence. Asset forfeiture laws were enacted to make sure that ill gotten money and property does not remain in the hands of those charged and eventually convicted of a crime.

Newspaper articles in the 80’s were replete with stories of assets that were seized in drug related cases. Soon thereafter, law enforcement began to expand the powerful tool. Items that are commonly seized include cash, cars, houses, property, and in one case a race horse.

Once the property is taken by the Government, it must be maintained. That means that the asset cannot loose its value because of anything the Government does with it. If the Government looses the criminal case, then the asset must be returned to the person or company from which it was taken. In the case of the race horse taken, it was given back almost immediately because the Government would have been responsible for making sure that the horse was fed, trained and cared for like it was at the owners stable.

That forfeiture complaint had said Schultz operated an interstate prostitution business since at least August 2001 — three months after earning her Stanford Law School degree — by charging as much as $1,300 for two hours, $5,000 for overnight and $15,000 for three days to serve clients in the Bay Area, Los Angeles, Washington, D.C., New York City, Chicago and Seattle. Her own April 2003 posting to an escort-reviews Web site had said that when she finished her law degree, she “owed over 300 thousand in loans and hated the prospect of being a lawyer for the next twenty yrs.”(sic)

A federal judge dismissed the civil forfeiture action in 2006 as Warthen and the government reached a secret settlement. Prosecutors filed the tax evasion charge against Warthen in September.


If you are need of a Los Angeles white collar defense attorney please contact Los Angeles criminal defense attorney Michael Kraut for 24/7 assistance by phone at (323) 464-6453 or toll free at (888) 334-6344 or online.

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