New York siblings face prison in tax evasion scheme

| Jun 27, 2019 | Criminal/Civil Tax Litigation

Following their guilty pleas, a federal judge informed four siblings in the New York area that they will have to serve a few months in federal prison. Additionally, they owe about $4 million in back taxes and penalties. They will have to pay this as part of their restitution in the criminal case.

The prison sentence came as a bit of a surprise even to federal prosecutors, who had not recommended that the family go to jail. In support of their recommendation, prosecutors pointed to the fact that all four had provided valuable testimony that led to the conviction of a solicitor who organized this scheme.

One of the siblings will go to federal prison for 6 months, while the other 3 will serve 4 months in prison each. They must surrender and start serving their terms later this summer. A couple of the siblings were involved with not-for-profit organizations, and one had been a political aide to United States Senators in a nearby state.

The alleged crime involved the siblings’ deceased father, who in his day worked on Wall Street. He set up a plan to pass along $12 million to his children, but to do so through an offshore account. The siblings then took a variety of steps to sneak this money back in to the United States without paying any taxes on it.

In this case, the siblings decided that their best option was to admit wrongdoing and cooperate with authorities. Many times, a strategy of negotiating and cooperating after a lapse in judgment is the best approach.

However, not every elaborate estate plan, even those involving foreign money, is illegal. Sometimes, authorities can confuse perfectly legitimate conduct for tax evasion. Under such circumstances, it will likely be important to have the help of an experienced criminal tax litigation attorney.

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