Cash IS Taxable

Cash IS Taxable

Law school grad turned call girl Cristina Warthen under house arrest after cheating the Government

Source: NY Daily News

Law school comes in handy when trying to evade taxes as a call girl, or at least that’s what one Stanford graduate seemed to think.

Cristina Warthen – a 2001 Stanford Law School graduate – was sentenced Monday on a federal tax conviction related to her upscale call-girl business, according to a report from Mercury News.

Warthen pleaded guilty for failing to pay taxes on nearly $133,000 earned in ’03 during her high-end prostitution days as a touring escort named Brazil. She serviced clients throughout the nation in various cities, including New York, Chicago and Washington.

The jet-setting Warthen, previously Christina Shultz, sold herself on a racy Web site called TouchofBrazil.net in hopes to pay for law school.

In a plea deal with the government, Warthen has been fitted with an electronic monitoring device while sentenced to one year of home detention, as well as three years’ probation.

Warthen is also responsible for paying $243,000 to the government, a mercy offer by prosecutors after Warthen demonstrated she could not afford the original amount of $313,000. Her recent divorce from David Warthen – co-founder of online search engine Ask.com – has left her broke and unemployed.

The once-wealthy Web entrepreneur lost his fortune and his wife after the stock market collapsed. According to the report, he filed for divorce this year citing “irreconcilable differences.”

In a San Jose, Calif., federal court, U.S. District Judge James Ware forced restrictions on Warthen’s escort advertisements while on probation.

According to Mercury News, the restriction on advertisements occurred once Assistant U.S. Attorney David Callaway told Ware that the former escort had posted Internet ads claiming “companionship” for $2,000 a night.

“We all know that’s a wink and nod, and what she really is advertising is high-end prostitution,” Callaway told the court, Mercury News reports.

Warthen has since been living temporarily in Seattle with her mother, and continues to advertise on the Web with more ambiguity surrounding her services.

Brian Getz – Warthen’s attorney – claims the government has no grounds to restrict his client’s free speech right to advertise, as long as she’s not breaking prostitution laws. Ware was unmoved by the plaintiff’s argument.

“It pains me … that you are asking the court for permission to engage in advertising an escort business,” Ware told Warthen, in the Mercury News report.