Girls Gone Wild founder Joe Francis, currently free on $1.5 million bond, has been accused of claiming $20 million in fraudulent expenses on his tax returns. He has pleaded not guilty to two felony counts of tax evasion. If convicted, he faces a possible 10 years in prison and a $500,000 fine.
However, Francis says he never knew anything about the tax problems until after he was indicted, and that the situation is really nothing more than his own CPA setting him up so he could collect a multimillion dollar “reward” from the Internal Revenue Service.
“IRS informant rules permit a CPA who actually plans and initiates the tax return mistakes to still collect the tax informant reward, which in this case could go as high as $10 million. If the case goes criminal, the tax rat gets even more.” – Robert Bernhoft, attorney for Joe Francis
Francis has filed a lawsuit against his former CPA, Michael Barrett, for fraud. Francis alleges that Barrett personally prepared, reviewed and approved tax ledgers with errors in them, and vouched for the correctness of those records with Francis’s tax preparers. Francis also claims that Barrett never brought the errors to his attention, or to the attention of anyone except the IRS; and that he pushed the IRS to bring criminal charges against Francis, so that he could collect a larger bounty.
Joe Francis’s tax evasion trial is presently scheduled to start on September 16th.