A Rolling Hills plastic surgeon, known for his slick advertisements and successful practice, could face eight years in prison and half a million dollars in fines after pleading guilty this week to federal tax evasion.
Dr. Lawrence A. Saks, 39, who pleaded guilty in federal District Court on Monday to one count of tax evasion and one count of filing a false tax return, will be sentenced Dec. 3 by District Judge Ronald S. W. Lew.
The case has prompted the Medical Board of California to open an inquiry that could lead to the suspension or revocation of the plastic surgeon's state license.
The pleas followed a year-long investigation by the Internal Revenue Service. It found that Saks attempted to conceal more than $665,000 in taxes from 1984-87 by routinely cashing the checks of his patients rather than depositing them into his business bank account, said Assistant U.S. Atty. Jeffrey C. Eglash.
"It was a pretty simple scheme," Eglash said.
Saks, who lives in a $2.3-million house in Rolling Hills and owns a number of other properties in the South Bay and Long Beach, was described by colleagues Wednesday as an aggressive marketer who never fit into the conservative local medical Establishment. Saks advertised in Cosmopolitan magazine and numerous local publications, using silhouettes of svelte women to promote liposuction, breast enlargements and other surgeries. His office number is listed as 54-PLAST.
Saks did not return phone calls this week to his offices in San Pedro and Torrance, nor did he talk with a reporter who visited the San Pedro office.
Lawyer Bruce I. Hochman, who represents Saks, described his client as "a quiet, hard-working medical person. . . . He did not report all of his income. That was a mistake for which he pleaded guilty."
Saks is "sincerely, legitimately remorseful," said Hochman, who praised Saks' medical skill and reputation and said there is no reason for the medical board to take punitive action.
Saks' patients "have no complaints about his practice of medicine. In this case the income is clean, clean, clean. What was wrong was the tax reporting only, and that is what he pled to," Hochman said.
One colleague, a longtime area plastic surgeon, called the charges against Saks "big news to the small town of plastic surgery."
"He's somewhat against the current of the rest of the South Bay plastic surgeons," said the doctor, who spoke on the condition that he not be identified. "There's always been an unspoken agreement here to stay away from advertising. We have a very clean community here, almost old-fashioned. There's nothing wrong with his ads. It's just that he's more like a Beverly Hills plastic surgeon. He's the only guy down here that does it."
Dr. Michael Falvey, a Torrance plastic surgeon, while agreeing that Saks is an aggressive marketer, said his medical credentials are unquestioned.
"In plastic surgery, we see a lot of bad doctors who are unskilled or doing wrong operations. None of that applied to (Saks). In his case, his business interests must have just gotten carried away," Falvey said.
The IRS investigation, Eglash said, found that Saks reported just over $60,000 in taxable income on his 1986 tax form when the actual amount exceeded $478,000. In the largest instances of tax evasion, Saks failed to pay more than $183,000 in taxes on his individual 1986 tax return and another $223,000 owed by his corporation for the fiscal year ending June, 1987, according to Eglash.
In pleading guilty to the two counts, Saks acknowledged evading the equivalent of about $200,000 in taxes in 1986, Eglash said. In exchange for that plea, the U.S. attorney's office did not pursue additional charges.
The state medical board's Torrance office has begun a review of Saks, with a decision on possible disciplinary action due before his sentencing in federal court.
"I would not want to prejudge this case. But . . . obviously we would consider this a serious violation of ethical conduct" because it is related to his medical practice, said Ron Kraemer, assistant chief of enforcement for the board.
"Our regulations make it clear that unprofessional conduct includes but is not limited to incompetence or negligence. It can be unethical behavior," Kraemer said.
If disciplinary action is taken against Saks, it would mark the first time he has run afoul of the state medical board since he received his license to practice in California on June 26, 1978, according to the board.
Saks, who is on staff at San Pedro Peninsula Hospital, graduated in 1977 from McGill University School of Medicine in Montreal. He completed his internship and surgical residency from 1977 to 1979 at Harbor General Hospital in Torrance (now Harbor-UCLA Medical Center) and White Memorial Medical Center in East Los Angeles.
He returned to McGill from 1980 to 1982 for a residency in plastic surgery and a fellowship in hand surgery. He is a member of the American Society of Plastic and Reconstructive Surgery and a fellow of the Canadian Royal College of Physicians and Surgeons.
The turn of events for Saks follows a dizzying period of prosperity for the plastic surgeon, who expanded his business and acquired significant real estate holdings during the years when federal prosecutors say he was bilking the government of taxes.
Recent county land records show, for example, that on New Year's Eve, 1985, Saks and his wife purchased a 24-unit apartment building on 12th Street in San Pedro valued then at almost $1.3 million as well as an adjacent $200,000 lot.
The following February, according to records, the Sakses and another couple bought a $370,000 home, with a swimming pool, on Sunnyside Ridge in Rancho Palos Verdes.
In December, 1987, the Sakses entered another real estate partnership with a Long Beach man to buy a 16-unit apartment building on East 10th Street. The Long Beach property, according to records, had an assessed value of just over $1 million at the time of purchase.
In March, 1988, Saks and his wife bought two additional apartment buildings: a 16-unit complex on Coronado Avenue in Long Beach valued then at $943,000 and a fourplex in San Pedro on 21st Street valued then at $416,000, records show. Last June 27, he bought an Inglewood funeral home on Manchester Boulevard valued then at $588,000 and a commercial building valued at $293,000, records show.
It was in April, 1988, that the Sakses bought their current home, the sprawling ranch house in the gated community of Rolling Hills that drew the attention of his competitors.
"I wondered, 'What am I doing wrong?' " said the plastic surgeon who sought anonymity. "I always wondered where he got all this money."
Until the income tax charges were unveiled this week, Saks' colleagues had attributed all of his material success to aggressive business tactics.
A recent full-page ad in South Bay Lifestyle magazine shows the silhouette of a naked woman on a hot-pink background to promote body contouring through liposuction. "If you are considering cosmetic surgery--a private consultation with Dr. Lawrence Saks is in your best interest," the ad reads. Saks has also advertised in telephone directories and local newspapers.
The marketing blitz, his medical reputation and good patient references paid off.
One current patient, who said she had found Saks through friends who were former patients, said that during a visit this month the office was full. There were eight to 10 people in the waiting room of the San Pedro office, which Saks shares with another doctor, she said. On a return visit, between 12 and 14 patients were waiting, said the woman, who had several moles removed by Saks.