"Girls Gone Wild" Founder Pleads Guilty

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Founder Joe Francis pleaded guilty Wednesday to filing false tax returns and will avoid further jail time in a tax case that spanned two states and several years.

Francis entered the pleas to two misdemeanor counts of filing false tax returns and one count of bribing Nevada jail workers in exchange for food.

The plea agreement calls for Francis, who has built a soft porn empire filming and marketing videos of young women, to pay $250,000 in restitution and receive credit for jail time served.

Francis was indicted by a federal grand jury on tax evasion charges in 2007 and has spent 301 days in jail. He will receive a year of supervised release.

U.S. District Judge S. James Otero accepted the plea and delayed sentencing until Nov. 6.

In the agreement, Francis acknowledged omitting nearly $563,000 in interest income on his 2003 tax return. Prosecutors initially alleged Francis took more than $20 million in fraudulent deductions in 2002 and 2003 on items such as a Mexican home where Francis entertained celebrities, a Porsche and other items.

The agreement calls for any tax liabilities of Francis or his companies from 2002 to 2008 to be handled in civil or administrative arenas.

Under terms of the deal, Francis also will acknowledge giving more than $5,000 in goods to a pair of Washoe County, Nevada jail workers in exchange for food. Francis was held at the jail from June 2007 to March 2008.

In a statement, Francis thanked Otero and his attorneys for their work on the case and said the resolution to the case will allow him to focus on the soft porn wares of the "Girls Gone Wild" franchise.

"I'm happy to finally be able to redirect my attention to the business at hand, which is to provide quality entertainment for our millions of fans around the world," Francis said in the statement.

Francis' attorney, Brad D. Brian, has said in court that prosecutors didn't understand Francis' business model and that the expenses were part of building the "Girls Gone Wild" brand. Trial exhibits that may have been shown to jurors included clippings from magazines showing celebrities such as Orlando Bloom and Kim Kardashian joined Francis at the estate in Mexico.

The agreement comes weeks before the scheduled start of Francis' trial, which has been frequently delayed.

Some of those delays were caused by Francis repeatedly changing attorneys, although the most recent stumbling block came after a key government witness, Francis' former accountant, turned over hundreds of previously undisclosed e-mails. Francis has used the e-mails as a basis of a civil lawsuit against his former accountant, Michael Barrett, and other former employees, contending they set up a shadow company and fraudulently billed him for hundreds of thousands of dollars.

Barrett's credibility as a witness came into question in recent weeks, with Otero warning prosecutors that Barrett posed problems for them. The judge noted that Barrett had sought a reward for turning Francis in, even though he may have also committed a crime.

Otero told prosecutors during a hearing earlier this summer that they should consider resolving the case before it went to trial. He had also questioned Francis' ability to control himself in the courtroom during the trial, nearly sending him to jail when he learned that Francis had taunted a prosecutor.

"The one thing I've learned about myself during this process is that I can be a difficult client, but they are a fantastic group of brilliant legal minds who recognized the truth when they saw it and had the passion to care about what happened to me," Francis wrote in his statement.

Copyright © 2014, Los Angeles Times
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