William Grimes, the Los Angeles attorney who won a $3.8 million civil claim on behalf of police brutality victim Rodney King in 1994, pleaded guilty Tuesday to failure to pay over $2.4 million in taxes.
Grimes entered his plea to one federal count of tax evasion, resolving allegations that the lawyer failed to pay taxes for nearly a decade, according to a plea agreement filed Oct. 17 in L.A. federal court.
Prosecutors said they would recommend no more than 22 months in prison and up to $9.5 million in restitution at sentencing on Feb. 11.
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 engaged in a scheme to thwart the 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, then routinely purchased cashier’s checks and withdrew cash from those business bank accounts, the indictment states. By not depositing income earned into his personal accounts, Grimes avoided IRS collection efforts, prosecutors said.
Grimes allegedly 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 filed individual income tax returns for tax years 2018 through 2021 reporting that he owed about $700,000 in taxes. Grimes did not pay the taxes that he self-reported he owes, according to the indictment.
King, 47, died in June 2012 from accidental drowning.