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Former Office Manager Pleads Guilty to Wire Fraud and Tax Evasion

Former Office Manager Pleads Guilty to Wire Fraud and Tax Evasion

According to a Department of Justice press release, a former South Dakota office manager recently pleaded guilty to federal criminal charges of wire fraud and tax evasion. In addition to being required to report wage and other types of legally obtained income, taxpayers are required to report income that was obtained through illegal means. The defendant in this case underreported both her legally and illegally earned income. If you have failed to report all of your income, have fraudulently inflated your deductions, claimed credits you were not entitled too, or have altogether failed to file a tax return for one or more years, it is in your best interest to contact an experienced tax attorney to assist you in coming into tax compliance.

Defendant Stole Money from Her Employer, Evaded Taxes

Court documents reveal that Jennifer Durham, 42, of Rapid City, South Dakota was employed as an office manager for Rapid City Professional Hockey, LLC between 2010 and 2019. During that time, she used stolen money to pay for her own personal expenses. In all, prosecutors estimate that she stole over $700,000. In an attempt to conceal her illegal activity, Durham altered the company’s books to disguise the theft as business expenses.

While employed at Rapid City Professional Hockey, Durham also failed to correctly report her full income for federal tax purposes. IRS investigators estimate that Durham underreported her income by more than $688,000, causing her to avoid paying over $186,000 of federal income tax.

Durham entered into a plea agreement with the Department of Justice and agreed to pay restitution to her previous employer of $700,000. She also agreed to pay restitution to the IRS in the amount of $186,277. Durham will be sentenced later this year and faces up to five years in prison for the tax evasion count and 20 years in prison for the wire fraud count.

Coming into Compliance with Unpaid or Underpaid Taxes

Having recently passed the extended filing deadline, many Americans undoubtedly failed to file their tax returns or filed their returns with inaccuracies. For instance, it is not uncommon for taxpayers to accidentally (or sometimes intentionally) underreport income or overreport deductions. Although these omissions or errors may have been simple mistakes, the longer that they go uncorrected, the larger the potential penalty will be upon the IRS discovering it, especially if a multiyear pattern of such fraudulent behavior is found.

Those who have failed to file a tax return for one or more years also face a similar reality. The longer that you wait to come into tax compliance, the harsher the potential penalty. While the simple act of failure to file is a misdemeanor punishable by one year in jail per occurrence, if any  “Spies evasion factors” are present in your fact pattern, misdemeanor non-filing can be ramped up to a felony.  One thing is always true: if the IRS must contact you to get you to come into compliance, you will have to work that much harder to minimize the potential consequences of tax noncompliance. An experienced tax attorney can work with you to understand your particular facts and circumstances and to develop a strategy for you to get right with the government.

Note:  As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process.  Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth.   See our Testimonials to see what our clients have to say about us!

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Regardless of your particular business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

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