Articles Posted in Tax Offenses

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Five partners at Ernst & Young – Robert Coplan, Martin Nissenbaum, Richard Shapiro, and Brian Vaughn, and Charles Bolton – were charged with a number of tax crimes in federal court in New York, specifically tax evasion, conspiracy to defraud the United States, and lying to the IRS. The Second Circuit said that the government didn’t prove that two of the men were guilty and send the case back.

Ernst & Young had developed a number of tax shelters. Tax shelters – to be clear – are not themselves necessarily legal or illegal. As the jury was instructed, “it depends on the facts.”

1102930_piggy_bank_1.jpgThere were five tax shelters at issue. The Second Circuit, in United States v. Coplan, described the tax shelter that was the basis of the tax evasion count this way:

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James and Theresa DeMuro owned an engineering company in New Jersey called TAD Associates.

Not unlike yesterday’s tax case from the Eleventh Circuit, TAD Associates withheld money for taxes from its employees paychecks. TAD did not send that money along to the IRS.

The IRS approached the DeMuros about this. It was a civil matter at that point – the IRS required the DeMuros to set up a special trust account where they were to put their employees taxes.

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Stuart Register ran a business that conducted criminal background checks on people.

He had a number of employees. Employees, of course, have to be paid. To pay them, he used a payroll company – PrimePay. PrimePay withheld taxes from the employees’ pay, and told Mr. Register how much he needed to send to the government for those taxes.

Mr. Register did not send money that was withheld to pay taxes.

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As the Supreme Court reminded us a few weeks ago, most criminal cases end in a plea. United States v. Saferstein, from the Third Circuit, is a stark reminder of how a plea can go sideways, and a lovely example of one feature of federal plea practice – appeal waivers.

GoInternet – They Made Money The New Fashioned Way

Mr. Saferstein was the CEO of GoInternet.

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Justice Scalia recently made headlines by taking a cheap shot at the ranks of federal district court judges.

As the Associated Press reported (hat tip to Sentencing Law and Policy):

Supreme Court Justice Antonin Scalia says the quality of federal judges has suffered because there are too many of them. Testifying before a Senate committee Wednesday, Scalia blamed Congress for making federal crimes out of too many routine drug cases. In turn, that created a need for more judges.