Benicia lawyer resigns after tax evasion conviction

A prominent Benicia businessman, school board member and attorney resigned from the State Bar last month after pleading guilty to one count of federal income tax evasion. DIRK ALAN FULTON [#88404], 54, was sentenced to five months imprisonment, five months home detention and was ordered to pay $115,000 in restitution to the IRS and a $28,000 fine. He was incarcerated in Lompoc and was scheduled for release Nov. 16. The bar had placed Fulton on interim suspension July 30 and his resignation took effect Oct. 10.

In February, Fulton admitted that he used funds from his businesses to pay personal expenses without declaring the money transfers and expenditures on his 1999 tax returns. According to court documents, Fulton paid only $2,364 in federal income taxes in 1999.

Prosecutors alleged that he did not report transferring money from various corporate interests, including Dirk Fulton Investments, Carquinez Realty Group and Dirk Fulton Professional Corporation to his personal use, including payment for construction of his Benicia home.

According to the plea agreement, Fulton owed the government between $70,000 and $120,000 in unpaid taxes.

Fulton was a former Benicia city council member and was midway through his second four-term term on the school board when he suddenly resigned the day after Christmas last year, saying he wanted to spend more time with his family. In fact, he signed a plea agreement 12 days before quitting the board. He also had served as school board president for two years.

Although the maximum penalty for tax evasion is five years in prison, prosecutors agreed to the lesser sentence as part of the plea agreement.

Several community members, including the former chief of police and retired state Sen. John Vasconcellos, wrote letters to the court on Fulton’s behalf. “His history of family devotion and community involvement stand in stark contrast to the present charge,” wrote his attorney, Richard J. Sideman, who asked that a period of supervised release after home confinement be reduced from two years to one.

However, U.S. Attorney McGregor W. Scott said, “It is particularly disgraceful that a man such as Dirk Fulton would willfully evade his duty to pay taxes. Dirk Fulton was in a position to know that public institutions cannot function unless people pay their taxes. He did not do his duty. He lied to his government and kept money to which he was not entitled.”

U.S. District Judge Edward J. Garcia refused to reduce the period of supervised release, saying Fulton did not deserve that “leniency.”

The judge also said he had received letters from community members complaining that the timing of Fulton’s resignation from the school board necessitated a special election to replace him. One letter writer estimated the cost of the election at $234,000 and suggested Fulton should reimburse the school district for that amount.