TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, June 16, 2009

Stanford Law Grad-Call Girl Lacks Resources to Satisfy Guilty Plea in Tax Evasion Case

I previously blogged (here and here) the case of 2001 Stanford Law Grad Cristina Schultz (now Cristina Warthen after her marriage to David Warthen, co-founder of the online search engine Ask Jeeves, now known as Ask.com), who pled guilty in January 2009 in California federal district court to failing to pay taxes on $133,717 she earned as a prostitute in 2003 (United States v. Warthen, No. CR-08-682). From the San Jose Mercury-News:

A Stanford law school graduate who pleaded guilty earlier this year to federal tax charges related to running an escort service is now unable to pay her full debt to the government because her estranged husband’s Internet wealth has dwindled so much he can no longer foot the bill.

A federal judge on Monday put off Cristina Warthen’s scheduled sentence in the case until she can resolve financial woes that have hit her since her plea deal was reached in January. At that time, Warthen pleaded guilty to tax evasion charges and agreed to pay at least $313,000 to the government to cover taxes on earnings from her days as an upscale prostitute who went by the name “Brazil.”

But in court papers filed last week, Warthen’s lawyers say her pending divorce from David Warthen, the co-founder of the online search engine Ask Jeeves, now known as Ask.com, has left her close to $100,000 short of being able to complete her plea deal. In court papers, Cristina Warthen’s lawyers say her estranged husband had agreed to cover $350,000 to pay for her legal troubles, including the plea amount, but has been reduced to “a mere shadow of his former financial self” because of the stock market plunge. As a result, Warthen’s lawyers told U.S. District Judge James Ware said she could get no more than about $230,000 from him in their pending divorce proceedings, leaving her well short of what she needs.

(Hat Tip: Law School Headlines.)

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