Newport Physician Convicted of Tax Evasion

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A Newport Beach physician was convicted this week of tax evasion after prosecutors accused him of embezzling $220,000 from a charitable hospital fund, authorities reported.

Bruce Allan Hagadorn, 56, was convicted of tax evasion Monday after he failed to file personal and business state income tax returns, according to the Orange County District Attorney’s office.

Hagadorn 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.

The OCDA also accused Hagadorn misappropriating $220,000 from a hospital fund that was designated for donations to the Hoag Hospital Foundation, the statement reads.  

He pleaded not guilty to an embezzlement charge, which was eventually dismissed, according to court records. He admitted to several other charges, including theft of more than $150,000, but they were also dismissed.

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 for $103,865 and $250,000 to the medical staff of Irvine Regional Hospital.

“Today’s conviction should send a clear message – tax cheating is not tolerated in the State of California,” said Franchise Tax Board spokeswoman Tami Grimes.

Hagadorn was chief of staff at Irvine Regional Hospital and served as a board member of the Medical Executive Committee, according to a statement released Monday from the OCDA.

Prosecutors argued that between January 2009 and December 2010, Hagadorn misappropriated $220,000 from the medical staff account at the hospital that his fellow physicians had established and funded as a nonprofit 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,” the OCDA statement explains.

Instead of donating the money, he wrote numerous checks to himself and deposited the money into his personal medical practice, Canyon Pacific OB/GYN, in Irvine, according to Deputy District Attorney Chuck Lawhorn of the Major Fraud Unit/White Collar Crime Team, who prosecuted this case.

Lawhorn also accused Hagadorn of willfully failing 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 OCDA statement reads.

This case was investigated by the Irvine Police Department and FTB.

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