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'Girls Gone Wild' creator indicted on tax evasion counts

"Girls Gone Wild" creator Joseph Francis was indicted Wednesday on charges that his companies, which sell videos of topless young women, claimed more than $20 million (EUR14.9 million) in false business expenses.

The federal indictment came the day after Francis was jailed on criminal contempt charges in Florida.

The Nevada indictment alleges that Mantra Films Inc. and its marketing arm, Sands Media Inc., claimed false deductions on the companies' 2002 and 2003 corporate income tax returns, the U.S. Department of Justice said in a statement.

Francis makes an estimated $29 million (EUR21.6 million) a year from videos of young women exposing their breasts and being shown in other sexually provocative situations.

The indictment also charges that Francis, 34, used offshore bank accounts and entities purportedly owned by others to conceal income he earned in those years.

"The government has chosen to make a criminal case out of what we believe to be at most a civil tax dispute," said Jan Handzlik, an attorney representing Francis in the Florida matter.

For 2002 and 2003, the government alleges Mantra overstated deductions by including more than $1 million for construction of a home in Mexico as "false footage" and professional service expenses, and falsely claimed more than $1.9 million as insurance expenses.

Sands Media claimed a combined $4.2 million in consulting expenses that were spent on construction of the home, the government alleges, and $3 million in false insurance claims. The indictment also alleges Sands Media claimed another $10.4 million in false consulting services expenses for 2002.

Francis reported taxable income for 2002 of $13.9 million and paid $3.5 million in taxes "when in truth and fact, he then and there knew well and believed that he had omitted additional income," the indictment said. For the following year, he paid $351,727 in taxes on reported taxable income of almost $1.16 million.

Justice Department officials said Francis is scheduled to appear in court May 22. If convicted, he could face up to 10 years in prison and $500,000 (EUR372,633) in fines.

The indictment is not related to Francis' legal troubles in Florida. 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 in 2003.

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

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