Steven Barkus and his associate Michael Lombardo have been sentenced to eight and five years in prison, respectively, for participating in a tax evasion and fraud scheme that cheated several close friends, family, and church congregation members out of hundreds of thousands of dollars. The victims’ believed they were investing “seed” money in several startup corporations. However, the two men used Steven Helfgott, now a disbarred attorney from Cleveland, Ohio, to collect and hide investor’s funds from the IRS. They used several shell bank accounts, as well as Helfgott’s attorney trust account to evade collection and divert the money for their personal use.
The sentence for both defendants in part arises from tax violations and their conspiracy to avoid paying taxes on the money obtained which constituted income to be reported. The Cleveland Office of the IRS and several other regulatory agencies recommended the case for prosecution after investigation. In addition to prison the defendants have been ordered to pay restitution to their victims of $905,000 and $2,788,778 to the Internal Revenue Service. The tax counts consisted of a conspiracy to evade the payment and assessment of taxes as well as substantive charges for evasion of payment and evasion of assessment.
Darryl Williams, Special Agent in Charge, IRS – Criminal Investigation stated, “Honest and law-abiding people are fed up with those who use deceit and fraud to line their pockets with other people’s money…The extensive joint investigation by the U.S. Attorney’s Office, IRS and U.S. Postal Inspection Service and the verdicts reached in this case should send a strong message to those who engage in this type of illegal activity.”