2-20-2023 3:35pm

News You May Have Missed

Anita Johnson-Brown Editor

LOS ANGELES –The DOJ announced on Thursday, February 16, 2023, that Tommy Lester Watts, 63, a.k.a. “Michael Nesbeth,” “Michael Kent,” and “Alex Mason,” A resident of Westwood pleaded to federal criminal charges for cheating victims out of more than $5 million alleging to sell bonds for large-scale construction building and different projects, and for not paying over $1.2 million in taxes.

Watts pleaded guilty to one, count of tax evasion and one count of transactional money laundering.

From September 2016 to September 2019, According to his plea agreement, Watts falsely declared he was experienced in and capable of providing surety bonds and other financial guarantees for large-scale tasks.

The defendant advised victims that he would aid them in obtaining financing for their projects through his different companies, including the Sherman Oaks-based Source One Surety LLC.

Watts belied indicating that any such bonds or guarantees were underwritten by established companies and financial institutions and that they were backed by assets in the millions or billions of dollars.

Yet, Watts and his businesses were not licensed to market such bonds in the state of California. And his claims regarding his experience, his customers – which purportedly included governments – his underwriting, and his supporting assets were not true. To make his scheme appear legitimate, Watts hijacked the corporate filings of other companies and created fake employees and accounts for underwriters and banks.

The defendant caused victims to send his companies roughly $5,238,344, the majority of which he paid on personal items such as renting high-end apartments, classic and extravagant automobiles, and the purchase of luxury retail merchandise.

Watts furthermore laundered victim payments via accounts held in the names of companies that were not registered and used fake taxpayer identification numbers and then utilized those accounts to spend victim reserves as his own. He concealed this revenue from the IRS in tax years 2017 through 2019, in which he failed to file any tax returns. Watts confessed in his plea agreement that he received a total of $4,683,430 in earnings that he did, report to the IRS for these three tax years.

The defendant agreed to forfeit to the United States almost $60,000 seized from two bank accounts he managed, a Subaru SUV, and a Mercedes-Benz. He additionally, agreed to pay the IRS a total amount of $4,226,535 in restitution, including a minimum of $1,863,035 for his tax liabilities.

The defendant is scheduled for the sentencing hearing on September 8, ordered by United States District Judge Maame Ewusi-Mensah Frimpong, at which time Watts, will face a statutory maximum length of up to five years in federal prison for the tax evasion count, and ten years in federal prison for the transactional money laundering.

The FBI, Homeland Security Investigations, IRS Criminal Investigation, and the California Department of Insurance investigated this case.

Assistant United States Attorney Kristen A. Williams of the Major Frauds Section is prosecuting this matter.

By Anita Johnson-Brown