Attorney Sentenced for Tax Fraud

A Westlake Village personal-injury lawyer has been sentenced to 16 months in federal prison and ordered to pay a $4,000 fine for conspiring to defraud the Internal Revenue Service of $2 million in unpaid taxes, authorities said Wednesday.

Roger Stout, 58, was sentenced Monday by U.S. District Judge A. Howard Matz, who said Stout’s failure to report and pay taxes reflected a “deep-seated willingness to engage in self-serving, greedy, and inappropriate behavior,” said Thom Mrozek, a spokesman for the U.S. attorney’s office.

According to Assistant U.S. Atty. Alka Sagar, who prosecuted the case, Stout failed to report income from his law practice.

As a personal-injury lawyer, Stout collected lump-sum payments from insurance companies, Sagar said. From those funds, he was supposed to pay the injured client, the physician who treated the client and himself to cover legal fees.

Rather than report the full amount he received for legal fees to the IRS, Saga said, Stout would write a check for a portion of the total amount to a fictitious payee and ask an employee in his law office to cash the check at the bank at which the account was held.

“Thinking he was a lawyer who was cashing a check for a client who didn’t have a bank account, the bank would cash the check,” Sagar said. Stout kept the cash and only reported to the IRS the portion he claimed to have earned as legal fees.

Stout amassed $2 million, Sagar said, which he failed to report on his 1990, 1991 and 1992 tax returns.

At the sentencing hearing, Matz ordered Stout to surrender to authorities April 20 to serve his sentence.

Stout’s ex-wife, Monica Navarro, 42, of Calabasas, previously pleaded guilty to failing to report $395,000 on her 1991 and 1992 income tax returns. She was sentenced to six month in prison at an earlier hearing, Mrozek said.

The case was investigated by the IRS Criminal Investigation Division, Mrozek said.