Lawyer dodged taxes, bought cars, IRS witness says Bel Air attorney spent four times the amount he reported, jury is told.

July 17, 1991|By Kelly Gilbert | Kelly Gilbert,Evening Sun Staff

Bel Air attorney Lester V. Jones spent $623,000 on cars, condominiums and miscellaneous expenses in 1982-84, but reported only $151,502 in taxable income for those years, an IRS agent has told a federal jury.

The IRS investigator, Robin Lord, testified yesterday that Jones, a former state delegate and prosecutor, spent $166,000 on cars -- Mercedes-Benzes, Cadillacs and a Corvette -- during those years.

Jones spent another $257,000 to buy or to make payments on twocondominiums in Ocean City and one in North Palm Beach, Fla., the agent said, and he spent $200,000 more on "miscellaneous" items, including furniture and landscaping for the condos and a garage for his collection of luxury and antique cars.

Lord testified in U.S. District Court in Baltimore as the final government witness at Jones' trial on charges of tax evasion and false reporting. The defense case was scheduled to begin today.

Lord said her examination of Jones' business and bank records showed that he failed to report as taxable income a $100,000 fee he received in an auto accident case and numerous other legal fees, ranging from $180 to $60,000, that he received in cash or in checks from clients and associate lawyers at his Rock Spring Road law firm.

Lord said she traced Jones' expenditures and his alleged tax evasion by comparing information from his case files, cash receipts, deposit slips and bank statements.

She told the jury that Jones simply cashed 77 checks from clients and associates in 1983 and 1984, the years he is charged with evading taxes on nearly $300,000 in income.

Lord said that while Jones was cashing fee checks and pocketing cash fees, the cash deposits made to his business account in First National Bank totaled only $4,400 in 1983 and about $9,000 in 1984. Records of the deposits to his business accounts were used by Jones, his secretary and his accountant to figure his taxable income, Lord said.

As prosecutor Joseph L. Evans led her through documents and charts, Lord said there were several months for which she traced deposits of cash legal fees to Jones' personal bank accounts in Perry Hall and Palm Springs, Fla.

She said she found no cash deposits of any kind in his business account for those months. While all that was going on, Jones rarely failed to deduct his business expenses from his taxes, the agent said.

On cross-examination, Lord rebuffed suggestions by defense counsel Stephen H. Sachs that Jones didn't try to hide anything from IRS agents who first audited his taxes and financial data in 1986.

"I believe he intended not to have all of his deposits reported" as income, she said to one of Sachs' questions about the defendant's personal bank accounts.

But she acknowledged that Jones paid some deductible business expenses with personal checks, including one for $2,500 that he wrote to the IRS, and he appeared to have paid an associate $9,000 of a $24,000 fee she testified earlier that he had not reported as income.

During Evans' direct examination, Lord said Jones pocketed fees totaling $6,350 in one month and $6,530 in another.

The defendant deposited $5,957 in fees paid by cash and checks in his business account during yet another month, the agent said, but failed to deposit a $2,500 cash fee that he received in that same month.

Lord also said she traced the $180 check Jones received from an associate lawyer as his share of a legal fee. She learned that Jones had endorsed it to an auto parts supplier to pay for a windshield for one of his Mercedes-Benz cars.

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