'Girls' creator Francis indicted for tax evasion

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RENO, Nev. -- "Girls Gone Wild" creator Joseph Francis was indicted by a federal grand jury Wednesday on charges that his companies that sell videos of topless women claimed millions of dollars in false business expenses.

The indictment alleges that Francis' companies, Mantra Films Inc. and Sands Media Inc., claimed more than $20 million in false deductions on the companies' 2002 and 2003 corporate income tax returns, the Department of Justice said in a news release.

The indictment also charges that Francis used offshore bank accounts and entities purportedly owned by others to conceal income he earned during those same years.

It further alleges that he transferred more than $15 million from an offshore bank account to a brokerage account in Irvine, Calif., held in the name of Rothwell Limited, a Cayman Islands corporation controlled by Francis.

The indictment was issued in Nevada because Francis, 34, reportedly lives in Incline Village along the northeast shore of Lake Tahoe, said Charles Miller, a Justice Department spokesman in Washington

Sands Media is also headquartered there and incorporated in Nevada, Miller said.

Justice Department officials said Francis is scheduled to appear May 22 before U.S. Magistrate Robert A. McQuaid.

Miller said the indictment is not related to Francis' legal troubles in Florida, where he was jailed Tuesday on a federal warrant for criminal contempt of court.

"That has nothing to do with this," Miller said.

Francis was arrested in Florida after stepping off a privately chartered jet and ordered held without bail pending a hearing Thursday before U.S. District Judge Richard Smoak, who issued the contempt citation.

"We are distressed to learn about the charges in Reno and will reserve all comment until we have seen the indictment," Jan Handzlik, a Los Angles attorney who is representing Francis in the Florida matter, said Wednesday.

Francis makes an estimated $29 million a year from videos
of young women exposing their breasts and in other sexually provocative situations.

He drew the contempt citation during negotiations in a civil lawsuit brought by seven women who were underage when they were filmed by his company on Panama City Beach during spring break in 2003.

Lawyers for the women told Smoak that Francis became enraged and verbally abusive during settlement talks, and the judge ordered Francis to settle the case or go to jail.

Negotiations continued with the help of a mediator but broke down last week, and Smoak issued a contempt of court warrant.

Francis initially refused to surrender and called Smoak "a judge gone wild."
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