Santa Barbara accountant sentenced to three years in federal prison in tax fraud case

Pybrum failed to report more than $1 million on federal tax returns

POSTED: 11:36 AM PDT Mar 11, 2013    UPDATED: 07:52 PM PST Mar 05, 2013 
SANTA BARBARA, Calif. -

A Santa Barbara accountant was sentenced to three years in federal prison on Monday after a federal grand jury convicted the certified public accountant of filing false individual income tax returns.

Steven Mark Pybrum, 61, who advertised on the Internet and appeared as a tax and financial expert on national TV, was found guilty last October in Los Angeles. Pybrum, who operated an accounting practice under the names of Pybrum and Company in Santa Barbara and Family Business Center was convicted on four counts of subscribing to false income tax returns for tax years from 1999-2002.

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Prosecutors said evidence proved that Pybrum brought in about $380,000 per year as an accountant but instead deposited those receipts into a bank account for his nonprofit charitable organization, the Foundation for Harmony and Happiness.

Pybrum supposedly set up the nonprofit to provide financial and conflict resolution to help couples avoid financial disputes, which Pybrum claimed to be the leading cause of divorce. Pybrum did not report hundreds of thousands of dollars in income on his own tax return but instead reported the income had been earned by the nonprofit providing marital counseling.

Prosecutors said there was no evidence that the foundation actually did any charitable work or earned any money for charitable activities during the four years. They also said the Foundation for Harmony and Happiness was simply a name on a bank account that Pybrum created to avoid paying taxes.

Further evidence presented showed Pybrum used both accounts to pay his personal expenses, including renting space in a Montecito mansion and buying an airplane, fishing boat and SUV. The Internal Revenue Service Criminal Unit conducted the investigation into Pybrum’s financial affairs.