Personal Injury Lawyer In Houston Who Handles Numerous Car Accident Cases

(HOUSTON, TX ) United States Attorney Chuck Rosenberg announced that Gene Burd and Paul Samson Christie have each been convicted of making a false statement on their 1997 Federal Income Tax Returns. Both men entered pleas to guilty to the federal tax charge at a hearing held this morning before Houston, Texas United States District Judge Melinda Harmon. Judge Harmon has set sentencing for September 30, 2005. Both men face a maximum of three (3) years in federal prison, without parole, a $100,000 fine as well as civil monetary penalties.

In connection with Burd's plea of guilty, the United States filed with the Court a document titled Government's Factual Basis. That document stated the following:

Gene Burd is a personal injury lawyer in Houston, Texas, who handles numerous car accident cases. He pays runners to solicit accident victims and bring the potential clients to his office. He contracts with his clients to make a claim against the other driver's insurance company on their behalf and he agrees to accept 33 percent of the settlement as his fee. Burd's office then refers the client to particular chiropractic clinics for therapy. Some clinic patients are referred to Burd's law office by the clinics.

After the therapy at the clinics is completed, Burd or his office will send a demand to the insurance company. After some negotiation, Burd settles the case and a check is mailed to him from the insurance company. When the case is settled, Burd takes the insurance company's settlement check and deposits it into his attorney-client trust account. He withdraws the money by writing three checks. One check goes to the chiropractic clinic to pay for the treatment. The second check goes to the client. The third check goes to Burd as his legal fee and is deposited into his operating account.

When the chiropractic clinic receives their check from Burd they often deposit that check into a third party account instead of into their clinic's operating account. After the check is cashed in a case in which the patient was referred to the clinic by Burd, the clinic owner meets privately with Burd and returns 40-50 percent of the check to Burd in the form of a cash kickback. Burd keeps the cash and does not deposit it into his operating account. This income received by Burd is never reported on his federal income tax return. The income reported by Burd on his income tax return is only that money that he received from the trust account by check and the salary checks received by Burd from his law firm. The cash kickbacks are not reported.

This scheme was in effect during the year 1997. On October 19, 1998, Burd reported income of $168,209 from Burd & Associates, P.C., a subchapter S corporation, on his 1997 Form 1040 U.S. Individual Income Tax Return. Burd signed that return under the penalties of perjury. This income designation made by Burd in the return is a material matter.

For each of the tax years 1996 and 1997, Burd failed to report the cash kickbacks received from the chiropractic clinics. Likewise, Burd failed to report his share of the settlement proceeds skimmed from those clinics as a part owner of the clinic. In the two-year period that includes the 1996 and 1997 tax years, Burd failed to report in excess of $686,114 that was personal income to him and his wife. Inclusion of this income would have increased the income tax due and owed by the defendant by approximately $192,112 for the two-year period. The defendant falsely subscribed to his 1996 and 1997 income tax returns willfully, which is a voluntary violation of a known legal duty.

Paul Samson Christie's plea agreement was filed with the Houston, Texas Court and contained a section titled “Factual Basis.” In the Factual Basis the government states the following:

In late 1996, Paul Samson Christie established a string of chiropractic clinics under the name of Houston Pain Management. These clinics largely operated to treat patients that had been in a car wreck and had been referred to the clinic by their attorney. Christie engaged in a kickback scheme with attorney Gene Burd . Christie agreed to kickback 50% of the clinic's share of car wreck settlements to Burd in cash.

The income and expenses reported on Schedule C of Paul Christie's 1997 tax return are based upon the deposits to, and checks from his Paul Samson Christie Sole Prop Houston Pain Management and Rehab bank account. During 1997, Christie failed to inform his tax preparer of additional income that had been diverted through other bank accounts called Eureka Check Cashing and Houston General and Cashing. Because of the checks diverted to these accounts, Christie caused the gross receipts on his 1997 Schedule C to be under reported by $146,752.52. This money was paid to Christie from attorneys as his clinic's share of the patients' car wreck case settlements. The tax loss from this material, false statement exceeded $40,000.

On October 18, 1998, Christie reported gross income of $726,798 on his 1997 Form 1040 U.S. Individual Income Tax Return. Christie signed that return under the penalties of perjury. The gross income designation made by Christie in the return is a material matter. The gross income designation by Christie should have been $873,550.52. The defendant falsely subscribed to his 1997 income tax return willfully, that is a voluntary violation of a known legal duty.

Burd and Christie intend to contest the amount of tax loss at their sentencing hearing.

This case was investigated by special agents from the Department of the Treasury, Internal Revenue Service. The case is being prosecuted by Assistant United States Attorneys Jay Hileman and Richard J. Magness.