Los Angeles – LawFuel.com – Tax Law News – 26 October 2012 – A Santa Barbara-based certified public accountant who advertised on his website that he has appeared as a tax and financial expert on national television shows was convicted late yesterday afternoon by a federal jury on charges that he underreported more than $1 million by pretending that his accounting income had been earned by his non-profit foundation for providing “marital counseling.”
Steven Mark Pybrum, 61, operating his accounting practice under the names of Pybrum & Company, LLP, and Family Business Center, was convicted of four counts of subscribing to false income tax returns. The jury deliberated for less than three hours before returning their verdict.
The evidence presented during a three day trial before United States District Court Judge Gary A. Feess showed that Pybrum subscribed to false individual income tax returns for the tax years 1999 through 2002. For the four years in question, Pybrum underreported total income and gross receipts on tax returns that were filed up to three years after they were due.
In 1999, Pybrum began depositing receipts from his accounting practice to a bank account held in the name of the non-profit charitable organization, Foundation for Harmony and Happiness (FFHH). Documents filed with the IRS granting FFHH its charitable status stated that it was established in order to provide pre- and post-marital financial and conflict resolution in order to help couples avoid financial disputes, which Pybrum claimed to be a leading cause of divorce.
Evidence presented at trial showed that between 1999 and 2002, Pybrum brought in up to $380,000 per year from accounting work, but instead of reporting that on his own tax return he pretended that this accounting income had been earned by FFHH for providing marital counseling. Prosecutors stated at trial that there was no evidence that the Foundation actually did any charitable work or earned any money for charitable activities during these four years, and that FFHH was simply a name on bank accounts that Pybrum set up to avoid paying taxes.
In addition, beginning in 1999 Pybrum used the Pybrum & Co. business account, and later the FFHH business account, to pay his personal expenses, including renting space in a Montecito mansion and buying a plane, fishing boat, and SUV.
Pybrum is scheduled to be sentenced by Judge Feess on March 4, 2013. At sentencing, Pybrum faces a statutory maximum penalty of 12 years in federal prison and fines totaling $1,000,000.
The investigation of Pybrum was conducted by IRS – Criminal Investigation in Los Angeles.