A Stanford University law school graduate has pleaded guilty to tax evasion on money made while working as as high-priced call girl to pay college debts.
Cristina Warthen, 35, entered the plea in San Jose federal court Monday to federal tax evasion charges, admitting she failed to pay taxes on nearly $82,000 earned in 2003 as an escort.
Warthen, who operated under the stage name "Brazil" and ran the Web site, Touchofbrazil.net.said she dealt only in cash in order to hide her income
She graduated in 2001, the same year she started the escort business.
Warthen admitted in her plea agreement that she exchanged sexual favors for money while visiting customers across the country, in cities including Washington, D.C., Chicago and New York.
In the plea agreement, Warthen admitted that she concealed her income by putting the money in a safe deposit box, buying money orders and cashiers checks without receipts and hiding cash in her apartment, a storage locker and an old law school book.
Her prostitution business first came to light in 2004 when the government searched her home in Oakland and found more than $61,000 in case in a safe deposit box. Later that year she married David Warthen, the wealthy co-founder of the online search engine Ask.com.
They currently live in Los Angeles.
Under the plea deal, she must pay the government $313,000 and likely will be ordered to serve one year of home detention when she's sentenced June 15. The number is the dollar figure is the "net proceeds" from her escort service.
With tax season fast approaching, IRS Special Agent Arlette Lee issued a caution for residents to properly file and pay their taxes.
"If you pay your taxes, whether you have legal or illegal income, the IRS may not go after you specifically for tax evasion," Lee said.
However, the IRS might consider money laundering or other charges related to illegal income, according to Lee.