Fraudidentity theftNaughty List

#1 on the Naughty List?

Checking the naughty list
– iStock (Getty Images)

“Christmas comes this time each year,” as the Beach Boys astutely observed in “Little Saint Nick.” That means Santa Claus will be making his annual “list,” checking it twice, and letting us know who’s naughty or nice. (That’s right, Santa “audits” himself by checking it twice.) This year, one San Diego resident will be somewhere near #1 on the “Naughty” list.

Lloyd Irving Taylor graduated from San Diego State University and Loyola Law School. As a CPA, he’s authorized to prepare tax returns and represent clients before the IRS. And as an attorney, he’s authorized to prepare tax returns, represent clients before the IRS, and represent them in court. He’s well aware of what the law says he and his clients can do to pay less tax, and what will land him a big lump of coal in his stocking.

But Taylor apparently hates paying taxes with a Grinch-like grinchiness. No Burgermeister Meisterburger could tell him he can’t have his toys!

So, he started off by stealing the identities of at least nine deceased children, some of whom had died as far back as the 1950s. He used those identities to finagle fraudulent passports from U.S. embassies in Europe. Then he used those passports to open financial accounts to hide his income and assets, including $1.6 million in gold coins.

Maybe stealing those identities made Taylor feel guilty. Why else would he have gone and made up over a dozen phony churches, too? He opened 31 more bank and investment accounts in the names of those churches. Then he argued that the churches’ tax-exempt status meant he didn’t owe tax on their income.

Things might not have been quite so bad if he had at least reported the income from his schemes. But Taylor, who’s now 71, has filed tax returns just seven times since he finished school. That works out to once every six years. Those unfiled returns add up to $5 million in unreported income and $1.6 million in unpaid taxes.

Let’s be honest here. It doesn’t say much for the elves at the IRS that Taylor flew under their radar for so long! But he eventually did wind up in the crosshairs of the San Diego Regional Fraud Task Force, an alphabet soup of agents from the IRS, Secret Service, San Diego Police Department, and State Department Bureau of Diplomatic Security. (Bet you didn’t know those last guys even existed!)

Taylor has been in custody since April, 2013 — the judge at his bond hearing noted his international travel on false passports, the millions in cash he controlled through his network of bank accounts, and his history of lying to banks as reason to rule him a flight risk. Last month, the jury at his trial took just 30 minutes to convict him on 19 felony counts. (They probably voted him guilty in the first two minutes, then had a cup of coffee or two just to make it look like they actually “deliberated.”) The judge sentenced Taylor to 57 months with his fellow naughty-listers in an institution not noted for the cheerfulness of its holiday decorations. Taylor also owes $2.2 million in restitution.

What makes Taylor’s case so outrageous, of course, is that he knows you don’t need to steal a dead child’s identity or establish a bogus church to pay less tax. You just need a tax plan to take advantage of all the IRS-approved deductions, credits, and strategies the law allows. You don’t even have to wait for Santa to leave them in your stocking — just call us, and see what holiday savings we can deliver!

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