A federal jury has convicted a Palo Alto psychologist of five counts of tax evasion and one count of theft of government property, federal officials announced on Feb. 5.
Hugh Leslie Baras, 69, a Berkeley resident with an office on Cambridge Avenue in Palo Alto, was convicted on Feb. 4, United States Attorney Melinda Haag's office said.
Baras formerly worked as a psychologist at Kaiser Permanente in Oakland and as an adjunct clinical assistant professor at Stanford University School of Medicine. He started a solo, private practice in Palo Alto in late 2002.
Evidence presented during the seven-day trial showed that Baras's private practice made more than $1 million between 2005 and 2009. He filed timely federal income tax returns for each of these years, but he omitted all of the income produced by his private practice.
For each of the years he filed, he claimed to have made between $30,000 and about $57,000. But his private practice instead earned more than $182,000 and $301,722. He paid a total of $29,534 in taxes, but he owed $406,447 for those five years, court documents show.
Baras was diagnosed in 2001 with polymyalgia rheumatica, an inflammatory disease that causes pain and stiffness in certain parts of the body. He was unable to walk through the Kaiser hospital in Oakland to see his patients, according to defense documents. He began his private practice again when he felt better.
Although he was self-employed and earning substantial income, he continued to collect Disability Insurance Benefits from the Social Security Administration. Between 2006 and 2009, he received payments totaling $80,615.80 to which he was not entitled, Haag and Jose Martinez, the IRS criminal investigation special agent in charge, said in a written statement.
Baras's defense claimed that medications he took for his disability, including steroids and opiates, affected his mental status, judgment and cognition, which likely caused the type of financial lapses in which he engaged.
After IRS agents confronted him in 2010, Baras began repaying the amounts he owed. He has now paid back the undeclared income and disability payments, according to defense documents.
Prosecutors claimed that Baras deliberately hid his income by structuring deposits and cashing checks over time so he would avoid the federal cash-reporting requirement banks make for amounts in excess of $10,000.
Baras is scheduled for sentencing on May 22 in Oakland. He faces a maximum of 35 years in federal prison and $1.5 million in fines.