Case # 15HF0303
Date: August 31, 2015
PHYSICIAN CONVICTED OF TAX EVASION AFTER MISAPPROPRIATING $220,000 IN DONATIONS FROM HOSPITAL FUND FOR CHARITY FOUNDATION
NEWPORT BEACH, Calif. – A physician was convicted today of tax evasion by failing to file personal and business state income tax returns after he misappropriated $220,000 from a hospital fund that was designated for donations to the Hoag Hospital Foundation. Bruce Allan Hagadorn, 56, Newport Beach, pleaded guilty to eight felony counts of willful failure to file tax return with sentencing enhancements for property damage or loss over $200,000, and aggravated white collar crime over $100,000. He was sentenced to one year in jail, three years formal probation, and paid restitution in full today to the State of California Franchise Tax Board (FTB) for $103,865 and $250,000 to the medical staff of Irvine Regional Hospital.
At the time of the crime, Hagadorn was the Chief of Staff at Irvine Regional Hospital and served as a board member of the Medical Executive Committee.
Between January 2009 and December 2010, Hagadorn misappropriated $220,000 from the medical staff account at Irvine Regional Hospital that the hospital physicians established and funded as a non-profit charitable organization. Prior to the hospital’s closure in January 2009, the Medical Executive Committee members voted to donate the funds remaining in the account to the Hoag Hospital Foundation and assigned Hagadorn with coordinating the donation.
Prior to donating any funds to the Hoag Foundation, the defendant wrote numerous checks from the account, paid himself in cash, and deposited the money into his personal medical practice, Canyon Pacific OB/GYN, in Irvine.
Hagadorn willfully failed to file personal state income tax returns from 2008 to 2010, and his business income tax returns for his practice from 2009 to 2013. He knowingly failed to file his tax returns in order to avoid personal and business income taxes.
The FTB criminal investigation program identifies and investigates cases of tax evasion and tax fraud to encourage compliance with California income tax laws and maintain the public trust.
“Today’s conviction should send a clear message – tax cheating is not tolerated in the State of California,” said Tami Grimes, FTB Public Affairs Spokeswoman.
This case was investigated by the Irvine Police Department and FTB.
Deputy District Attorney Chuck Lawhorn of the Major Fraud Unit/White Collar Crime Team prosecuted this case.