July 15, 2025 #1 Local News, Information and Event Source for the Century City/Westwood areas.

Westwood Man Sentenced to Prison for $5 Million Fraud and Tax Evasion Scheme

Defrauding Victims and Tax Evasion Lead to Lengthy Federal Prison Term

By Dolores Quintana

Tommy Lester Watts, also known as “Michael Nesbeth,” “Michael Kent,” and “Alex Mason,” received a 110-month prison sentence today for defrauding victims of over $5 million. The scheme involved purported bond sales for large-scale construction and other projects, alongside evading taxes exceeding $1.2 million.

U.S. District Judge Maame Ewusi-Mensah Frimpong handed down the sentence and ordered Watts to pay $8,995,879 in restitution. Watts had pleaded guilty on February 16 to one count of transactional money laundering and one count of tax evasion.

Between September 2016 and September 2019, Watts falsely presented himself as experienced and capable of providing surety bonds and financial guarantees for substantial projects. Victims were told that Watts could facilitate project financing through his companies, including Source One Surety LLC in Sherman Oaks. He falsely claimed that these bonds were underwritten by reputable institutions and supported by assets worth millions or billions of dollars.

However, Watts and his companies lacked the necessary licenses to sell such bonds in California. His representations regarding experience, clients, underwriting, and asset backing were all fabricated. To give the appearance of legitimacy, Watts tampered with corporate filings of other companies and fabricated employees and accounts for underwriters and banks.

Victims transferred approximately $5,238,344 to Watts’s companies, the majority of which he spent on personal expenses, including high-end cars, luxury apartments, and luxury retail items. He further laundered these funds through unregistered corporate accounts using fake taxpayer-identification numbers, concealing this income from the IRS for tax years 2017 through 2019. He failed to file tax returns during these years, resulting in unreported income totaling $4,683,430.

Watts has agreed to forfeit nearly $60,000 seized from two controlled bank accounts, a Mercedes-Benz car and a Subaru SUV. He will also pay $4,226,535 in restitution, including $1,863,035 for tax liabilities.

Prosecutors highlighted the devastating impact of Watts’ actions on his victims, including the loss of businesses, life savings, and generational properties. The investigation was conducted by the FBI, Homeland Security Investigations, IRS Criminal Investigation, and the California Department of Insurance. Assistant U.S. Attorney Kristen A. Williams of the Major Frauds Section prosecuted the case.

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