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Businessman Sentenced For Tax Fraud Connected To Prostitution

CHARLOTTE, N.C. — A Charlotte businessman was sentenced Wednesday for hiring prostitutes and writing them off as business expenses.

James Smith, 41, is the first of Sallie Saxon’s [pictured] clients to be sentenced. Saxon, who ran a high-end prostitution ring in Charlotte, is serving time in a Georgia prison.

Smith was able to get in and out of court without being caught on camera. But what Eyewitness News learned about Smith in court and through court papers shed light on the man who hired prostitutes for five years and used his company to pay the tab.

Smith came to federal court in August and pled guilty to tax fraud. In court Wednesday, prosecutors said during his sentencing that Smith hired prostitutes from Saxon from 2002 until 2007 and wrote them off as business expenses.

Court documents show Smith’s attorneys, Matthew Hoefling and William Mayberry, asked the judge to be more lenient on Smith because he’s the sole provider for his wife and two small children. They also said his construction company, Red Clay Aggregates Inc., employs 80 people.

Hoefling and Mayberry added that Smith has already paid $30,000 in fines and $19,000 in restitution. Smith’s attorneys also added Smith has been punished by the negative publicity he’s had to endure in this case.

Smith is one of only three out of Saxon’s nearly 2,000 clients who has been charged. Smith said in court he was sorry for what he’s done and he bears the shame and embarrassment every day. He was sentenced to 18 months probation.

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