Apr 12, 2007 10:53 am US/Pacific
'Girls Gone Wild' Founder Faces 10 Years In Prison
Joe Francis Indicted On 2 Counts Of Tax Evasion
LOS ANGELES (CBS) ―
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Francis allegedly deducted more than $20 million in false business expenses on corporate income tax returns filed in 2002 and 2003.
Bay County Sheriff's Office
The Santa Monica entrepreneur who founded the "Girls Gone Wild" empire has been indicted by a federal grand jury in Reno, Nev., on two counts of tax evasion.
The indictment of 34-year-old Joe Francis Wednesday follows his arrest by federal marshals Tuesday on a contempt-of-court citation stemming from a civil case in Florida, where he is being held without bail, the Los Angeles Times reported.
Wednesday's charges alleged that Francis deducted more than $20 million in false business expenses on corporate income tax returns filed in 2002 and 2003 by two of his companies, Mantra Films Inc. of Santa Monica and Sands Media Inc. of Nevada. The charges were revealed in press releases issued by the Justice Department and the Internal Revenue Service.
According to the L.A. Times, the alleged improper deductions included $3.78 million that was counted as a business cost when it was actually spent to build a residence in Punta Mita, Mexico. In addition, $10.4 million in "false consulting services" was deducted, as was a $500,000 false insurance expense, according to the indictment cited by The Times.
The indictment also alleged that Francis used offshore bank accounts to conceal income earned in 2002 and 2003, The Times reported.
Authorities said Francis could face up to 10 years in prison if convicted. He's also subject to fines of up to $500,000.
His attorney, Jan L. Handzlik, told The Times that the indictment was unwarranted.
Francis made a fortune selling videos, advertised heavily on late-night infomercials, that featured scantily clad young women cavorting at resorts and in nightclubs.
The Nevada indictment is potentially the most serious legal trouble that Francis has faced to date, according to The Times. If convicted, he faces as many as 10 years in prison and fines of as much as $500,000, Justice Department
officials told the newspaper.
(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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