Bel Air attorney Douglas A. Jones has admitted under oath that he cheated on his income tax returns from 1980 through 1983 by failing to report several thousand dollars in cash fees he received from clients.
Jones made the admission to a federal jury in U.S. District Court in Baltimore as he testified yesterday for the prosecution at the criminal trial of Lester V. Jones, another Bel Air attorney for whom Douglas Jones worked as an associate lawyer during the years that he filed the false tax returns.
Lester Jones, a former Baltimore County prosecutor and state legislator, is on trial on tax-evasion and false-filing charges tied to nearly $300,000 in income that he allegedly failed to report on his 1983 and 1984 tax returns and on amended returns he filed after the IRS began to investigate him.
Sources said yesterday it is unlikely that Douglas Jones could be prosecuted for his false returns because the six-year statute of limitations expired in 1989, apparently about the time IRS agents learned of his tax evasion.
Under questioning yesterday from prosecutor Ira L. Oring, Douglas Jones said he failed to report about $5,500 in income on his 1981 and 1982 tax returns, and "maybe a few hundred dollars" on his 1980 return. He did not say, nor was he asked, the extent of his tax cheating in 1983, and he did not say why he did it.
Douglas Jones fell under suspicion in 1989 when IRS agents interviewed him about Lester Jones' financial affairs.
As the questioning began, Douglas Jones said, he invoked his Fifth Amendment right against self-incrimination.
Douglas Jones also told the trial jury that he paid Lester Jones thousands of dollars in fees by checks that Lester Jones cashed in 1983 and 1984. Those fees were paid to satisfy an arrangement in which Lester Jones got 60 percent of the legal fees earned by the associate lawyers who worked in his law firm.
Oring led Douglas Jones through dozens of the checks, which the prosecutor entered into evidence to show that Lester Jones personally endorsed and cashed them instead of funneling them through his law firm's operating account so they would be reported as income.
The witness testified that Lester Jones had endorsed the checks, and said that it wasn't necessary for Lester Jones to cash them in order for him, Douglas Jones, to get his fees for the cases. Lester Jones' share of the fees, Douglas Jones told the jury, was $68,502.
However, Douglas Jones testified on cross-examination by defense attorney Stephen H. Sachs that the Form 1099 for 1984 showed all the fees that the witness paid to the defendant. Sachs contended that Lester Jones reported all of that income on his 1984 tax return.