Francis' Tax Evasion Trial Moved to L.A.
The ruling was issued late Friday and officially transmitted Monday to the Central District of California. U.S. District Judge Brian Sandoval granted the change of venue, saying it was justified because Francis and most of the people expected to testify live in Southern California.
Francis and his companies Mantra Films Inc. and Sands Media Inc. were indicted on two counts of tax evasion by a federal grand jury in April 2007. Federal prosecutors claim Francis reported taxable income for 2002 of $13.9 million and paid $3.5 million in taxes, "when in truth and fact, he then and there knew well and believed that he had omitted additional income," according to the indictment. For 2003, Francis paid $351,727 in taxes on reported taxable income of almost $1.16 million.
The government also claims that Francis used offshore accounts to conceal income, and the companies claimed more than $20 million in phony deductions. Some of the testimony, lawyers have said, will focus on a house in Punta Mita, Mexico. The government alleges Mantra overstated deductions by including more than $1 million for construction as "false footage" and professional service expenses, and falsely claimed more than $1.9 million as insurance expenses.
Francis' lawyers, however, say witnesses will testify the home wasn't completed until 2005, and that it was used as a location for commercial and promotional videos for "Girls Gone Wild" productions during the years in question.
Government lawyers opposed the change of venue, arguing that Francis "held himself out" to be a Nevada resident. They also said that Sands Media is incorporated in Nevada, and that the company's bank account in Incline Village, Nev. — an upscale community on the east shore of Lake Tahoe — "was a significant tool in the defendant's tax evasion scheme."
Francis' trial had been scheduled to begin Aug. 26 in Reno, but a new date will be scheduled in Los Angeles.