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Most, if not all, of us have been told from a very early age that it pays to have friends or family in high places. It seems frequent that we observe those who seem prime candidates for a period of incarceration go free because they happened to “know somebody”. Although that kind of luck may help prevent being investigated, charged, convicted, or punished for an expansive range of crimes, negative consequences stemming from tax fraud and tax evasion typically cannot be abrogated because of who you know. We’ve included a story below that goes to show that even individuals with family ties to the federal government are unable to escape the tight grip of a tax enforcement action.
According to several news reports, Chaka Fattah Jr, son of 11-term congressman Chaka Fattah, was sentenced to a lengthy prison sentence and hit with tough monetary penalties. The sentencing came after Fattah Jr. was found guilty by a federal jury last November on 22 counts including theft from a federal program, wire fraud, bank fraud, lying to obtain a loan, and failing to file a federal income tax return. He will spend 60 months in a federal prison and was ordered to pay over a million dollars in restitution. Once he is released, he will spend an additional five years being supervised.
According to prosecutors, Fattah Jr. lied to United Bank in order to obtain a small business loan (backed by the Small Business Association). Court documents show that the proceeds of the loan were used to pay off gambling debt and loans for personal vehicles. When Fattah Jr. was investigated by the SBA investigators after a default of the loan, he said that his business was not as profitable as he had hoped and that he could settle the debt for less than it was worth.
In addition to obtaining fraudulent loans, Fattah Jr. held a position as Chief Operating Officer at Delaware Valley High School, a private institution that offered services to the Philadelphia School District. During his time there, defrauded the school district out of nearly one million dollars by submitting false expense and salary information. Finally, Fattah Jr. failed to file any tax returns for three years. The IRS estimated that had he reporting all of his income (including the amounts that he obtained illegally), he would have a tax bill in excess of $90,000.
Although it is surprising to see an individual whose father is a representative for the federal government commit so many crimes, it is not surprising to see him punished for it. The IRS, Department of Justice, and many other federal law enforcement and investigatory agencies don’t particularly care who you are related to or who you know. If you are suspected of committing a tax or other financial crime, you will have the weight of the federal government coming down from all sides.
Although the IRS initially handles violations of the tax law, other agencies can be responsible for your investigation. Any one of the law enforcement or government agencies that investigated Fattah Jr. very well could have reached out to the IRS and their Criminal Investigation Division with a tip. In the end, taxpayers must understand that entities within the federal government share information: before long, every bit of information is spread around to the entire group. Thus, if you are being suspected of committing a crime that netted you income and are being investigated by the FBI, you better believe that the investigating agent will have told someone from the IRS about it before lunch time. One investigation launches another and the government will not rest until you are in a federal prison.
Fortunately, an experienced tax attorney knows how this process works. Compared to a representative who is strictly an accountant, a tax lawyer has been trained in not only tax and accounting, but has also received an extensive training in criminal procedure, constitutional law, and the rules of evidence. A tax attorney knows what the government must prove in order to win a conviction against you and can also help you keep quiet during an investigation when a statement may be harmful to your case.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing are a unique group of individuals who possess extensive experience in representing a variety of client-types will a wide range of tax issues. It is typical to feel scared and alone when you receive an examination notice from the IRS or are the subject of an investigation. Let our team take some of that burden off of you and zealously work toward a successful conclusion to your situation, minimizing any damage that could otherwise occur. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation and be sure to check out our YouTube channel for more information about our services, including a video about failure to file your taxes