William Grimes, the Los Angeles attorney who was responsible for winning a $3.8 million civil claim on behalf of police brutality victim Rodney King in 1994, has been indicted on federal charges for his alleged failure to pay over $2.4 million in taxes, officials announced Friday.
The indictment filed Thursday in Los Angeles federal court charges Grimes with one count of attempted tax evasion and four counts of willful failure to pay taxes. He is expected to be arraigned in downtown Los Angeles on April 10.
According to federal prosecutors, Grimes owed the Internal Revenue Service more than $1.7 million in taxes for tax years 2010 and 2014. The IRS tried to collect the unpaid taxes from Grimes by, among other things, levying his personal bank accounts.
In response to IRS collection efforts, from 2014 through 2020, Grimes allegedly engaged in a scheme to thwart the tax levies by keeping his personal bank account balances low, according to the U.S. Attorney’s Office.
Grimes deposited the money he earned from representing clients into his law firm’s business bank accounts, and then he routinely purchased cashier’s checks and withdrew cash from those business bank accounts, the indictment alleges. By not depositing income earned into his personal accounts, Grimes allegedly avoided IRS collection efforts, according to prosecutors.
With the alleged scheme, prosecutors say, Grimes withdrew about $16 million in funds from the business accounts in cashier’s checks during those years, rather than paying the amount owed to the IRS.
Grimes also allegedly filed individual income tax returns for tax years 2018 through 2021 reporting that he owed about $700,000 in taxes. Grimes allegedly did not, and has not, paid the taxes that he self-reported he owes, according to the indictment.
In total, Grimes is alleged to have caused a tax loss of over $2.4 million to the IRS.
If convicted, Grimes faces up to five years in prison for the tax evasion count and up to one year in prison for each count of willful failure to pay taxes, according to the U.S. Attorney’s Office.
King, 47, died in June 2012 from accidental drowning.