Palo Alto psychologist sentenced, fined for tax evasion

Lawyer says he plans to appeal conviction

A Berkeley psychiatrist with a practice in Palo Alto was sentenced Thursday, July 31, to more than two years in prison and ordered to pay restitution of $593,513 to the Internal Revenue Service and the Social Security Administration for tax evasion and theft of government property, U.S. Attorney Melinda Haag announced.

Hugh Leslie Baras, a former Kaiser Permanente psychologist and adjunct clinical assistant professor at the Stanford University School of Medicine, opened his own private practice on Cambridge Avenue in late 2002. From 2005 through 2009, his private practice generated more than $1,000,000 of income, according to Haag. Although he filed timely federal income tax returns for each of these years, Baras omitted all of the income produced by his private practice from those returns.

In addition, although he was self-employed and earning substantial income, Baras continued to collect Disability Insurance Benefits from the Social Security Administration, Haag said. 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.

Between 2006 and 2009, Baras received Disability Insurance Benefits payments to which he was not entitled, totaling $80,615. Baras' defense claimed that medications he took for his disability, including steroids, opiates and anti-depressants, affected his mental status, judgment and cognition, which likely caused the type of financial lapses in which he engaged.

Also during this period, Baras sold nearly $600,000 worth of gold and silver coins to a coin-broker in Oakland, Haag said. These sales created capital gains, which Baras also failed to report on his tax returns.

Baras, now 70, was convicted in February of five counts of tax evasion and one count of theft of government property.

Baras' attorney, Marc Zilversmit, told the Weekly Friday that he plans to appeal the conviction.

"We believe it was an abuse of power for the IRS and U.S. Attorney to to prosecute an elderly and sick man who had no prior record and had always paid his taxes and paid back everything with interest," Zilversmit said.

He said that over the last two-and-a-half years, Baras paid back more than $840,000 in taxes, interest and overpayments.

"He neglected a bunch of financial obligations, including his house ... and then he paid it all back," Zilversmit said.

Thursday's sentencing was handed down in Oakland by Judge Yvonne Gonzalez Rogers, who also sentenced Baras to a three-year period of supervised release, ordered him to forfeit $80,615, and to pay a fine of $7,500. Baras was ordered to self-surrender for service of his sentence on Sept. 29.

The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation and the United States Social Security Administration, Office of Inspector General, Haag said.

Elena Kadvany

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