Greuel Campaign Manager John Shallman Had Tax Liens Prior to Durkee Arrest

By Brian Hews and Randy Economy

John Shallman, campaign manager for Wendy Greuel.

John Shallman, Campaign Manager to Los Angeles Mayoral candidate Wendy Greuel was been hit with thirteen different state and federal tax liens in the last six years totaling more than $2.2 million.

Shallman and his attorney have publicly indicated that the tax liens are the result of convicted ex-campaign treasurer Kinde Durkee who managed the high-powered political consultant’s personal estate. Durkee is now serving a prison sentence for bilking millions of dollars from some of the most influential elected officials in California.

But an investigation of public records by Los Cerritos Community Newspaper has called into question Shallman’s statement because a majority of the liens were filed prior to Durkee being arrested.

Durkee was arrested September 2011 on suspicion of mail fraud. She was found guilty and sentenced to eight years in prison in 2012.

According to public records, Shallman had liens filed in Sep. 2006 for $302,115, another in May 2007 for 12,635, one in Dec. 2009 for $202,121, four in 2010 for $214,998 in April, $353,280 in May, $304,675 in May, and $211,998 in June. A $329,368 lien was filed in August of 2011.

The timing of the filed liens contradicts Shallman’s prior statements that they resulted from Durkee’s fraud.

“The IRS and California will give you twenty days if the check is not included with the return”, said Dave Ress a CPA from Irvine, “if you do not pay, a letter will go out in the next thirty days demanding payment. If you do not pay within twenty days of that letter, they will file the lien immediately.”

“That timeline dictates a lien could be filed approximately seventy days from the filing of the tax return. An Oct 15, 2006 non-payment of taxes would generate a lien by late December, 2006,” Ress commented.

“The liens can only relate to the tax year it was filed or the years before, they can’t file liens on future earnings” said Ress.

“In the case of Mr. Shallman, the liens for 2006 to 2011 would relate to those years or prior years only,” said Ress.

In a statement to the LA Times in March of this year, Shallman’s attorney, Scott Brown, said that Durkee handled Shallman’s “taxes, personal and business bookkeeping for years. It seemed like such a relief to have someone we thought we could trust handling all of our business affairs. Instead it turned into a nightmare,” he said.

“The lien notices would have been mailed to Mr. Shallman’s residence, the address stated on the tax returns,” said Ress, “so presumably he knew all the liens were filed.”

Shallman Attorney Andrew Cohen refused to comment on the liens.

Jeff Corless, senior advisor with the Kevin James for Mayor campaign commented, “Every time Wendy Greuel comes in contact with numbers, they just don’t add up, wouldn’t she have the same problem as Mayor?”

Shallman is in legal hot water in another high profile case when the campaign lawyers of Los Angeles City Attorney Carmen Trutanich filed additional motions in a Los Angeles County court last week that he allegedly engaged in promissory fraud, and unfair business practices during a campaign for Los Angeles County District Attorney in 2012.

Shallman and Greuel came under fire two weeks ago when Los Cerritos Community Newspaper published the official city calendar of the Controller. In those documents, Shallman and Greuel were listed as meeting more than 150 times during a four-year period on what appears to be politically related meetings, strategy sessions, as well as attending several dozen political fundraising events for her Mayoral campaign coffers.