A South Bay plastic surgeon who was sentenced to six months in custody this week for evading more than $665,000 in federal taxes will face possible sanctions by the state board governing medical practices.
Dr. Lawrence Saks, 39, of Rolling Hills, is being accused by the Medical Board of California of engaging in “unprofessional conduct” because of the income tax evasion, said Ron Kraemer, the board’s assistant chief of enforcement.
The accusation follows Saks’ sentencing Monday to three months in federal prison and three months in a halfway house for his conviction on one count each of tax evasion and filing a false tax return.
In addition to the jail time, District Judge Ronald S. W. Lew ordered Saks to perform 1,500 hours of community service and pay a $200,000 fine. Saks also must pay the back taxes and about $1.1 million in interest and penalties.
Saks’ attorney, Bruce I. Hochman, called the judge’s sentence fair, and Assistant U.S. Atty. Jeffrey Eglash, who prosecuted the case, agreed that “it’s an appropriate sentence for this case.”
Saks declined to answer phone calls to his office in San Pedro.
Kraemer said the medical board’s accusation against Saks, which is currently being drafted by the state attorney general’s office, would probably result in a disciplinary action somewhere between public reprimand and permanent revocation of his license, which are the minimum and maximum penalties.
In a felony conviction that does not involve patient neglect, a doctor would probably be “looking at free community service, an ethics course and continuing education,” Kraemer said, stressing that he was not talking specifically about Saks’ case.
Kraemer said once the accusation against Saks is drafted, it could take six months to schedule a hearing. A decision by the board would follow within 30 days of the hearing.
At San Pedro Peninsula Hospital, where Saks is on the staff, officials are “very concerned” about Saks’ conviction and will consider action once they receive official word of the sentencing, said hospital President John Wilson.
Saks, who also has an office in Torrance, had pleaded guilty in September to one count of tax evasion and one count of filing false federal income tax returns. The pleas followed a yearlong Internal Revenue Service investigation that found that between 1984 and 1987 Saks routinely cashed the checks of his patients rather than depositing them in his business bank account.
During the three-year period, Eglash said, Saks cashed more than 1,500 business checks totaling $892,000, none of which was deposited or reported as income. Eglash described 1986 as the year Saks pocketed the most income, failing 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.
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 scheme, coupled with a booming, well-advertised plastic surgery practice, helped Saks accumulate property on the Palos Verdes Peninsula and in San Pedro, Long Beach and Inglewood that made him the envy of his local colleagues. Saks lives in a $2.3-million house in Rolling Hills and owns an interest in the Peninsula Athletic Club.
His vigorous self promotion--his advertisements in Cosmopolitan magazine and local publications featured shapely young women and his special phone number 54-PLAST--irritated some colleagues in the local medical Establishment.
“He’s somewhat against the current of the rest of the South Bay plastic surgeons,” one competitor said after learning of the charges against Saks. “There’s always been an unspoken agreement here to stay away from advertising.”
The state board’s proceeding against Saks marks the only time that the 1977 graduate of McGill University School of Medicine, in Montreal, has faced disciplinary action since he received his California medical license in 1978.