Most people have seen her on television, the attorney willing to help you with your tax problems.  However today, Roni Deutch has closed her law firm after 20 years.  With her law firm suffering from $10million of debt and personal debt of $5 million as well as investigation by the California Attorney General for swindling clients out of $34 million as well as shredding near 2.7 million documents (Sac Bee).  It’s interesting that she carried such high levels of debt since her law firm took in roughly $25 million a year while spending about $3 million on television advertising.  However, she’s now faced with the prospect of declaring bankruptcy and faces hundreds of counts of contempt and court fines for her violations.

What Is Roni Deutch Being Accused Of?

Roni Duetch’s problem comes from what (then) California Attorney General Jerry Brown called a “heartless scheme” that swindled thousands of people out of legal fees.  Additionally, she was accused of hiring sales agents who employed high-pressure sales tactics, misrepresentations and false promises to persuade them to retain her firm.  For example, sales agents told potential clients that Deutch had a 99% success rate dealing with the IRS, but Proescutors found that her actual success rate was closer to 10%. (FP)

Deutch was collecting between $1,600 to $4,700 in legal fees to help with a person’s IRS tax debt.  However, Deutch appears not to have saved her clients any real money.  In fact, most clients had to pay the entire tax debt AND interest and penalties.  Additionally, the IRS normally places a tax lien on a person’s assets while the tax negotiations were in place.

Roni Duetch Firm And Personal Problems

Deutch’s firm is accused of shredding some 1,643,000 to 2,708,600 pages of documents.  The Attorney General claims that they won’t be able to fully prosecute Deutch because these documents are lost forever.  Additionally, she is being charged with violating a preliminary injunction by failing to issue nearly $435,000 in refunds to her clients within 60 days.

Finally, Deutch is also being accused of personally withdrawing over $200,000 from the law firm’s accounts and her personal accounts despite her accounts being frozen.  That she may have made over $20,000 in unnecessary expenditures (like gifts) and a payment to a NASCAR racing team.  The Attorney General is seeking to fine Deutch $1,000 and imprison her for 5 days for each count of contempt.