Central Coast accountant sentenced for fraud involving sham non-profit organization

March 5, 2013
Steven Mark Pybrum

Steven Mark Pybrum

A Santa Barbara-based certified public accountant has been sentenced to 36 months in federal prison for failing to report more than $1 million on federal tax returns by pretending that money earned through his accounting business came from a charitable foundation he called the Foundation for Harmony and Happiness.

Steven Mark Pybrum, 61, who resided in Montecito and claimed on his website that he appeared as a tax and financial expert on national television shows, was sentenced late Monday afternoon following his conviction last year on four counts of filing false income tax returns.

Pybrum fraudulently used money from his non-profit organization to pay personal expenses, including renting a Montecito mansion and buying a plane, a fishing boat and an SUV.

At Friday’s sentencing hearing, United States District Judge Gary A. Feess stated Pybrum operated a “blatant, calculated, tax-fraud scheme,” and that his conduct was “indefensible.”

Pybrum, who operated his accounting practice under the names of Pybrum & Company and Family Business Center, was convicted by a jury last October. The evidence presented during a three-day trial showed that Pybrum subscribed to false individual income tax returns for the tax years 1999 through 2002, and that he underreported his income on tax returns that were filed up to three years late.

In 1999, Pybrum began depositing receipts from his accounting practice into a bank account held in the name of the Foundation for Harmony and Happiness (FFHH). Documents filed with the IRS stated that FFHH was established to provide financial and conflict resolution to help couples avoid financial disputes, which Pybrum claimed was a leading cause of divorce.

The evidence presented at trial showed that between 1999 and 2002, Pybrum brought in as much as $380,000 per year from accounting work. But instead of reporting that income on his own tax return, he claimed that money had been earned by FFHH for providing marital counseling. Prosecutors stated at trial that there was no evidence that FFHH actually did any charitable work or earned any money for charitable activities during these four years, and that FFHH was simply a name on bank accounts that Pybrum set up to avoid paying taxes.

The investigation of Pybrum was conducted by the IRS in Los Angeles.

 


15 Comments

  1. Niles Q says:

    I wonder if this guy cooked the books for his clients as well? The IRS is no doubt looking into every tax return he filed for other people. What a potential mess this crook has cooked up! If he personally got $380,000 from doing taxes, his clients’ returns must be in the tens of millions, especially in Montecito. You know how rich people operate, they swap stock tips, and the names of good accountants all the time.

    Like or Dislike: Thumb up 3 Thumb down 0

  2. tomsquawk says:

    “Steven Mark Pybrum, 61, who resided in Montecito and claimed on his website that he appeared as a tax and financial expert on national television shows”

    Yep, what an expert.

    Like or Dislike: Thumb up 4 Thumb down 1

  3. Pelican1 says:

    This guy must have gone to cooking school….cause he most surely cooked the books.

    Like or Dislike: Thumb up 3 Thumb down 0

  4. MaryMalone says:

    So THAT’s who we need to contact about CAPSLO, Family Ties, etc…. The IRS in LA.

    Like or Dislike: Thumb up 12 Thumb down 0

    • tomsquawk says:

      anybody that would like to collect atxes but that is a good start. probably also the state in that respect as well.

      Like or Dislike: Thumb up 2 Thumb down 0

  5. doggin says:

    He learned from some of the finest non profits in the US.

    The American Red Cross President and CEO Marsha J. Evans’ salary for the 2011 was $951,957 plus expenses.

    The United Way President Brian Gallagher receives a $675,000 base salary along with numerous expense benefits .

    UNICEF CEO Caryl M. Stern receives $1,900,000 per year (158K) per month, plus all expenses including a ROLLS ROYCE.
    Less than 5 cents (4.4 cents) per donated dollar goes to the cause.

    Like or Dislike: Thumb up 15 Thumb down 0

  6. tomsquawk says:

    yes!

    Like or Dislike: Thumb up 1 Thumb down 0

  7. Robert1 says:

    He was only doing what the government does on a daily basis, except he got caught and didn’t have the shield of a government agency to hide behind.

    Like or Dislike: Thumb up 10 Thumb down 5

  8. bobfromsanluis says:

    To all of the “doubters” who think the CAPSLO and Family Ties stories will not result in any prosecutions or convictions, reread this article and pay attention to the time lines for the actual fraud, the arrest, trial and sentencing dates; then look for articles about the whole Kelly Gearhart mess and those timelines as well. To anyone and everyone connected to the CAPSLO and Family Ties stories, if you are not 100% positive that you did not participate in any actions that could be viewed by a governmental regulatory agency as being completely on the “up and up”, you better sock away a huge amount of money for your upcoming legal defense; the wheels of justice grind very slowly, there is a deliberate method to making sure that every “i” is dotted, every ‘t” is crossed and any prosecutions pursued are an almost guaranteed conviction; even then, a lot of “horse trading” can occur to garner admissions of guilt with reduced jail times or fines. IF you work for a government agency or an agency that administers a government contract, you are not immune to prosecution for breaking the law, period.

    Hot debate. What do you think? Thumb up 35 Thumb down 3

    • r0y says:

      This guy was “easy evil” – that is, he was a private citizen with a private business and charity; his biggest regret (after getting caught) probably was that he did not work for the government, thus the “easy evil” to put away. I would be amazed if ANY fines, fees and especially prison time come down on CAPSLO / Government Ties (er… Family Ties).

      Like or Dislike: Thumb up 13 Thumb down 5

  9. Informed says:

    How easy can it get to exploit all these so called charitable organizations..remember the trust fund donkeys in harmony. Remember Jim Jones and fhe peoples temple. CCN keep up the investigative reporting. Not referring to this story but all the jabs at you for not naming sources is bogus. The hallmark of investigative reporting is an oath to not reveal sources. Think of the scooter libby case and the reporter who went to jail for months .

    Like or Dislike: Thumb up 16 Thumb down 3

    • SLOBIRD says:

      If not CCN, who!

      Like or Dislike: Thumb up 13 Thumb down 1

      • danika says:

        Praise, CCN!….and remember to donate to and support them in reward for their excellent work!

        Like or Dislike: Thumb up 10 Thumb down 2

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