Disbarred Lawyer Sentenced to 12 Years in Prison for Stealing Injured Clients’ Settlement Money and Cheating on Federal Income Taxes
A disbarred personal-injury lawyer was sentenced today to 144 months in federal prison for stealing settlement money from multiple clients, including a multimillion-dollar settlement that should have been paid to a car accident victim, and for cheating on his federal income taxes.
Philip James Layfield, a.k.a. “Philip Samuel Pesin,” 48, formerly of Coto de Caza, was sentenced by United States District Judge Michael W. Fitzgerald, who said in court that Layfield’s actions were “appalling” and his criminal conduct was “sheer evil.”
Judge Fitzgerald found the total loss in this case to be approximately $5,552,756. The exact amount of restitution that Layfield will be ordered to pay to his victims will be determined at a hearing scheduled for May 12.
At the conclusion of a 13-day trial in August 2021, a federal jury found Layfield guilty of 19 counts of wire fraud, one count of mail fraud, one count of tax evasion, one count of failure to collect and pay over payroll taxes, and one misdemeanor charge of failure to file a tax return.
Layfield owned and operated law firms, including Layfield & Barrett (L&B), which, at various times, maintained offices in Los Angeles; Irvine; El Segundo; Park City, Utah; and Scottsdale, Arizona.
After he had misappropriated millions of dollars from clients’ settlements, Layfield relocated to Costa Rica. Just before getting on a flight to Costa Rica, Layfield borrowed $700,000 from a business lender by providing misleading information and failing to disclose material information. He then used substantial portions of the loan proceeds for personal expenses, including buying a horse and shipping horses to Costa Rica.
In one case, Layfield entered into an agreement to represent an individual who was struck by an automobile in Orange County and suffered significant injuries. After negotiating a $3.9 million settlement related to the accident, Layfield misappropriated the money owed to the victim – approximately $2 million – for personal and unrelated business uses, including to pay clients whose settlement proceeds Layfield had earlier misappropriated. Long after Layfield misappropriated the victim’s settlement proceeds, Layfield attempted to placate the victim by paying her $25,000 from other clients’ settlement proceeds.
Layfield also failed to file a federal income tax return for the tax year 2016, despite receiving more than $3 million, including embezzled client settlement money. Layfield also caused his law firm to not pay approximately $120,000 in payroll taxes to the United States government for the second quarter of 2017.
“The evidence, including [Layfield’s] own testimony, showed that [Layfield] repeatedly stole money from his trust account that he should have paid to his clients who had suffered horrible personal injuries,” prosecutors argued in a sentencing memorandum. “They had hired [Layfield] to bring them closure and some sense of relief. Their faith in the legal system shaken, [Layfield] compounded his clients’ stress and anxiety by forcing them to hire other counsel to try to recover money from [Layfield], only to find little or nothing.”
The State Bar of California disbarred Layfield in October 2018. Layfield also was a certified public accountant, but his CPA license expired in July 2019, according to the California Board of Accountancy.
Homeland Security Investigations, IRS Criminal Investigation and the FBI investigated this matter.
Assistant United States Attorneys Mark Aveis and Carolyn S. Small of the Major Frauds Section and Ian V. Yanniello of the International Narcotics, Money Laundering and Racketeering Section prosecuted this case.
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