Heath fraud case figure ordered to pay more than $20.8 million in state taxes
08:08 PM PST on Tuesday, November 4, 2008
By LOU HIRSH
A judge Tuesday ordered Daniel W. Heath to pay the state of California more than $20.8 million in taxes owed from the sale of securities at his now defunct investment firm.
Heath, 51, was sentenced in September to 127 years in state prison for his role in a $190 million investment fraud scheme that bilked nearly 1,600 victims, mostly elderly retirees. He was convicted in January on 400 criminal counts.
Matthew Albee, an investigator with the California Franchise Tax Board, said in a Tuesday hearing the state determined Heath owed $20,850,120 based on his income at D.W. Heath & Associates, on which taxes were not paid between 1998 and 2003.
Riverside County Superior Court Judge Ronald Taylor stipulated that the state should not receive money until Heath's investment scheme victims are made whole. A court-appointed receiver, through three disbursements over the past two years, was able to retrieve only about 22 cents on each dollar of investors' money.
The judge in September ordered Heath to join his two co-defendants in paying $117 million in restitution to victims, including promised interest payments on investments and other money that the receiver has been unable to retrieve through asset liquidation. The receiver has seized and liquidated the bulk of Heath's real estate holdings and financial accounts.
The court on Tuesday set a Jan. 6 hearing to decide the fate of an IRA account held by Heath at TD Waterhouse. County Deputy District Attorney Michael Silverman said the account is worth somewhere between $20,000 and $50,000, depending on how it was affected by recent stock market fluctuations.
Heath was not at Tuesday's hearing. His attorney, Christopher Oliver, said Heath will remain in Riverside County Jail while he receives medical treatments, before being transferred to state prison. Heath's trial last year was delayed when he had surgery related to pain in his back.
Heath has filed for an appeal of his case.
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