Legal Newswire Blog

Studio City resident, Steven Krell, a 61 year old ex-accountant and Los Angeles lawyer, who pleaded no contest to state grand theft charges in 2008, was sentenced on Monday to probation and house arrest. Krell was sentenced for filing federal false tax returns after embezzling nearly $1.5 million from two of his clients, including an elderly woman with dementia.

Krell, a former partner in the Los Angeles firm of Green, Hasson and Janks, pleaded guilty in June. He told U.S. District Judge Percy Anderson he used the stolen money for his own use and lied to the government.

Krell admitted in his plea agreement that he embezzled $1,476,900 from the elderly woman, her trust and a physician starting in 1997 and continuing through 2003, says Michael Moriarty of the Internal Revenue Service.

The Daily News Wire reports that to accomplish his scheme, Krell had signature authority over bank accounts belonging to the trust and the woman, facilitating withdrawals, according to court papers. In the second case, Krell falsely told the doctor he was investing his funds.

Anderson sentenced Krell on Monday in downtown Los Angeles to three years of probation, including 30 hours of community service per month and eight months of house arrest, Assistant U.S. Attorney Paul Rochmes said.

Krell’s attorney, Michael Proctor, told the court his client had already paid about $500,000 in restitution.

In February 2008, Krell was sentenced in Los Angeles Superior Court to seven years and four months behind bars for the same underlying conduct – grand theft.

The judge stayed the prison term on the condition that Krell comply with the terms of his probation and continue long-term psychiatric treatment after he made “significant” restitution payments, according to the District Attorney’s Office. Krell also served less than a year in county jail and was placed on supervised release for seven years.

In the state case, Krell, who was also once a licensed attorney, admitted helping himself to nearly $1 million from the trust of a 90-year-old woman, who was mentally incapacitated, and looting about $400,000 from the physician’s account he was managing.

As part of his plea, Krell agreed to file amended tax returns, reflecting $514,125 in illegally obtained proceeds, Moriarty said. In addition to the tax due, Krell is liable for the fraud penalty, which amounts to 75 percent of the tax due on the proceeds he embezzled.

The thefts were discovered in 2003 after a business manager became suspicious when he learned Krell was staying in expensive suites in Las Vegas and gambling at high-roller tables.

Rochmes said Monday’s sentence would have no effect on Krell’s stayed sentence for grand theft since those crimes were addressed in 2008, and the current federal case involves a separate issue.

The Daily News Wire contributed to ths story.

Related searches:
Tax Attorneys