Used the attorney’s IOLTA to evade paying taxes
Date: January 15, 2020
A federal jury convicted a Texas attorney John O. Green and his client Thomas Selgas today for conspiring to defraud the United States. The jury also convicted Selgas of tax evasion. Selgas's wife, Michelle Selgas, was acquitted of conspiring to defraud the United States and tax evasion.
According to the evidence presented at trial, Selgas conspired with Green, an attorney licensed to practice in Texas, to defraud the United States by obstructing the Internal Revenue Service (IRS) from assessing and collecting Selgas's taxes. Selgas and his wife owed approximately $1.1 million in outstanding taxes that Selgas refused to pay. When the IRS made efforts to collect the outstanding taxes, Selgas concealed funds by using Green's Interest on Lawyers Trust Account (IOLTA) rather than using accounts in his own name. An IOLTA is a bank account used by a lawyer to hold money in trust for clients. From 2007 to 2017, Selgas deposited proceeds from the sale of gold coins and other income into Green's IOLTA and Green would then pay the Selgases personal expenses, including their credit card bills, from that account. Selgas and Green also filed a false tax return on behalf of MyMail, Ltd., an intellectual property development and licensing partnership Selgas co-founded, omitting a substantial portion of the partnership's income.
U.S. District Judge Karen Gren Scholer will set sentencing at a later date. Selgas faces a statutory maximum sentence of five years in prison for each of the conspiracy and tax evasion counts.
Green faces a maximum sentence of five years in prison for the conspiracy count. They also face a period of supervised release, restitution and monetary penalties.