A federal judge in Oakland sentenced a Berkeley, California man to 30 months in prison after being convicted of tax evasion. The man, 70 year old Hugh Baras, is a psychologist and a former clinical professor at Stanford University.
In February, a jury convicted Baras of 5 counts of tax evasion and 1 count of theft. Prosecutors say that although he filed timely returns, Baras excluded much of his income when preparing those returns. They say that Baras was injured in 2001 while at work for a hospital group. He applied for social security disability and ultimately received benefits. As a condition of receiving social security, Baras was required to alert Social Security if he later returned to work.
Prosecutors say that Baras did go back to work almost immediately. Instead of working for a hospital where he would receive a W-2, however, Baras opened his own private practice. There the IRS says he collected over $1 million in fees. None of that money was reported on his tax returns.
At trial, Baras admitted having unreported income but claimed he suffered an “encapsulated delusion of poverty” and therefore lacked the mental capacity to support a conviction. Unfortunately for Baras, the jury didn’t believe him. Testimony revealed that he was actively treating patients for mental illness while claiming to suffer from one. Perhaps more importantly, the banking evidence showed that he cashed patient checks yet deposited disability checks. Clearly he was able to differentiate between the two.
Baras’ lawyers argued that his depression, anxiety and the medications he took effected his cognitive abilities and contributed to his poor choices. Evidently the judge agreed and cut Baras a break in his sentence. (Prosecutors argued the U.S. sentencing guidelines required a sentence of 4 years or more.)
Following the sentence, there were no statements from the U.S. Attorney in San Francisco or the IRS. According to a report in the San Jose Mercury News, Baras’ attorney Marc Zilversmit, said “We think it’s an abuse of power to pick on a sick man who, at the time, was severely ill and taking medications for his illness.”
Failing health can be considered by a judge when sentencing a defendant but lawyers must be careful how they argue mental illness. Although Baras likely does suffer from some impairment, asking a jury to let someone walk on their crimes is a hard sell.
The author of this post, attorney Brian Mahany, is a tax lawyer concentrating in criminal tax matters, offshore tax reporting and tax audit defense.