The United States Attorney's Office for the Northern District of California announced today that Wade Vincent Shang, a Certified Public Accountant and an attorney licensed to practice law in California with offices in Daly City and San Jose, was convicted by a federal jury on three counts of tax evasion for the 1996, 1998, and 1999 tax years in violation of 26 U.S.C. § 7201.  He was acquitted of two counts for the 1995 and 1997 tax years.

At trial, evidence was presented showing that Mr. Shang, a personal injury attorney, received checks from insurance companies to settle his clients' claims.  After receiving the checks Mr. Shang arranged to meet his clients at the Bank of America where he had the clients endorse two checks: one from an insurance company for deposit to Mr. Shang's attorney-client trust account and another check from Mr. Shang's attorney-client trust account to the client.  The check from Mr. Shang's attorney-client to the client was for an amount in excess of the client's portion of the settlement funds.  Mr. Shang would then deposit the insurance check and cash the client's check.  Mr. Shang then paid the client his or her share of the settlement proceeds in cash, but in an amount less than that described on the client's check, thereby creating the false impression that Mr. Shang had greater business costs than he really incurred. Mr. Shang kept the balance of the cash. One of Mr. Shang's former employees testified that the defendant admitted he paid clients cash to avoid income taxes.   

When Mr. Shang learned he was the target of an investigation by IRS Criminal Investigation Division, he held a holiday dinner party to which he invited former clients to whom he paid cash settlements and who he had not seen in years. Mr. Shang also visited former clients at their home and place of employment to determine if the IRS had questioned them about their dealings with him.  He gave holiday gift certificates to one such client and to another he gave $800. 

The maximum statutory penalty for each count in violation of 26 U.S.C. § 7201 is 5 years and a fine of $100,000.  A sentence will be imposed against Wade Vincent Shang by United States District Court Judge William Alsup on October 21, 2003. 

The prosecution is the result of an investigation by the Criminal Investigation Division of the IRS.  Jay R. Weill and Thomas Moore were the Assistant U.S. Attorneys who prosecuted the case.