Attorney Michael Thiel
Prominent, New Orleans Criminal Defense Attorney Michael Thiel pleaded guilty on 12/7/16 to tax evasion for failing to pay almost $1m in federal taxes. Despite earning substantial income from his law practice, Thiel failed to pay $736,527 in federal income tax, penalties and interest and $261,725 in employment tax, penalties and interest for 2003 through 2013.
Thiel structured the 2007 purchase of his Baton Rouge home to conceal his ownership of the $435,000 property behind trusts that he owned, making it look like he was renting the home from trusts. Under the plea agreement, Thiel plead guilty to one count of tax evasion and faces up to 37 months in jail. Sentencing has been set for 3/22/17.
According to Jerome R. McDuffie, Special Agent, IRS Criminal Investigations (New Orleans):
“Today’s guilty plea represents a win for the US taxpayers. As a member of the legal profession, Michael Thiel knew his requirement to pay both his personal income and employment taxes, but chose to use alter-ego nominee trusts and bank accounts to violate the laws.”
For more info see DoJ release, Louisiana Criminal Defense Attorney Pleads Guilty to Tax Evasion
Cristopher Swartz, Former Owner of Jreck Subs
In September 2016, Christopher Swartz of Watertown, NY plead guilty to one count each of wire fraud and tax evasion for cheating investors out of $9.5m+ during the period 2005-2015. He faces 20 years in jail and could be ordered to pay restitution and a fine of up to $250,000 when sentenced January 2017.
Between 2005 and 2015, Swartz engaged in a promissory note scheme to defraud lenders and investors and evade at least $3.5m in taxes and obstruct the Internal Revenue Service. Swartz used his multiple interests in Jreck Subs chain and other food/restaurant businesses to raise money by fraudulently inducing lenders with the promise of repayment at high interest rates and ownership interests in the companies.
Swartz misappropriated and diverted funds received and when lenders and investors sought the return of funds, Swartz attempted to lull them with false and fraudulent excuses and “bad checks” and also concealed his assets and income to avoid seizure and collection by lenders, investors and judgment creditors to prevent recovery of their funds. In order to keep investors at bay Swartz would “write checks for partial repayments, which would often bounce… he attempted to lull investors into a false sense of security and hope that their funds would be returned.
Swartz admitted that between 2005-2015, he engaged in a 10-year tax evasion scheme, filing false tax returns that understated his income. He diverted money from business accounts and disguised those diversions as loans and business expenses. He used cash to diminish traceability of funds and concealed his ownership of various assets using multiple entities and nominees. He falsified partnership tax returns and attempted to impede the IRS’s ability to collect employment taxes.
Swartz faces up to 20 years in jail for wire fraud and 5 years in jail for tax evasion. He also agreed to an order of restitution to his victims. The Federal District Court Judge order a forfeiture of his assets (including his royalty payments from Jreck Subs) which if a final forfeiture order is entered, criminally forfeited assets may be used as a source of funds to pay restitution to victims (which may be in excess of 130 victims).
According to the US Attorney and the IRS:
“Mr Swartz used his business enterprises to steal from lenders, investors and the United States, hiding behind an elaborate web of entities and financial transactions… The defendant’s wide-ranging, persistent and lengthy fraud and tax evasion schemes cost investors and the IRS millions of dollars.. he is to be held accountable for his brazen conduct… As highly trained and experienced financial investigators, IRS Special Agents (CID) are particularly adept at tracing the flow of funds and uncovering hidden assets.
Mr Swartz’s conviction serves as a warning to anyone who schemes to divert money from a business in order to conceal income and evade taxes. This case serves as a clear notice that no one is above the law, and those individuals who seek to evade their tax obligations will face prosecution and incarceration, regardless of the complexity of their schemes or economic status.”
For more info see DoJ release, New York Restaurant Entrepreneur Pleads Guilty to Ten-Year Investment Fraud Scheme and Tax Evasion.