Ruby Ridge lawyer faces fraud charges
LOS ANGELES – A prominent attorney who has filed many high-profile lawsuits against law enforcement agencies has been indicted on charges of trying to evade paying more than $100,000 in federal income taxes, authorities said Friday.
Stephen Yagman, 61, faces 19 counts that include bankruptcy fraud and money laundering. He surrendered to federal authorities and U.S. Magistrate Judge Patrick Walsh later ordered him released on $100,000 bond to be secured by property within two weeks. Arraignment was set for July 3.
The indictment was returned by a federal grand jury on June 1, but it was only unsealed after the conclusion of a trial that involved a Yagman client accused of killing her baby by nursing with methamphetamine-tainted breast milk. A Riverside County jury deadlocked in the case and a judge declared a mistrial Thursday.
Yagman had a role in the aftermath of the 1992 Ruby Ridge standoff in Idaho.
He also is well-known for bringing cases against police agencies. He filed dozens of lawsuits against the Los Angeles Police Department, accusing it of framing suspects and making false arrests. Yagman was able to convince a judge that the department should open internal documents under the federal criminal racketeering enterprise act.
Yagman also sued President Bush and other officials for alleged violations of constitutional rights of a detainee at the U.S. prison camp in Guantanamo Bay, Cuba, and sought class action status on behalf of all detainees.
Another Yagman suit targeted the Los Angeles County Sheriff’s Department, claiming county jail inmates have had their civil rights violated and have been subjected to deplorable conditions.
The indictment alleged Yagman filed federal income tax returns for 1994 through 1997 but paid only a small amount to the Internal Revenue Service. By not paying the full amount, he owed nearly $160,000 because of interest and penalties, according to the government.
He also failed to pay significant amounts of federal payroll taxes owed by Yagman & Yagman P.C., which was his law firm at the time, the indictment said.
“He is one of the few people ever charged with not paying all of the tax he correctly declared on his returns,” Yagman’s attorney, Barry Tarlow, said in a statement. “A comprehensive defense investigation demonstrated that Stephen Yagman is an innocent man wrongly accused.”
Yagman is accused of trying to conceal his assets and hamper the collection attempts by IRS agents. He used various bank and brokerage accounts in his girlfriend’s name to deposit and disguise his personal funds, including about $776,000 that was given to him by relatives, according to the indictment.
Among other cases, Yagman was involved in the aftermath of the 1992 shootout between U.S. agents and white separatist Randy Weaver at Ruby Ridge, Idaho, that left a deputy marshal and Weaver’s son and wife dead.
Former U.S. Attorney General Ramsey Clark and Yagman became unpaid “volunteer” special prosecutors for Boundary County, Idaho, in a 1997 attempt to prosecute an FBI sharpshooter for involuntary manslaughter for shooting Weaver’s wife. The case was dropped in 2001 by a new county prosecuting attorney.
Yagman filed for personal and corporate bankruptcy in 1999, even though he lived in a 2,800-square-foot house in Venice, prosecutors said. He failed to disclose that he made mortgage and property tax payments on the house and made other misrepresentations and omissions to a bankruptcy court, the indictment said.
He also failed to disclose personal bank and brokerage accounts that he controlled, but were in his girlfriend’s name, as well as hundreds of thousands of dollars in legal settlements, client payments and attorney’s fees that he received in 1999 and 2000, the indictment said.