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According to a Department of Justice press release, a federal jury convicted Wagdy Guirguis and Michael Higa of conspiracy to defraud the United States, in addition to several other charges. According to the Department of Justice, Guirguis owned several engineering firms and employed Higa, a Certified Public Accountant, to serve as the Controller and an officer for several of them.
Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of obstructing the administration of the Internal Revenue laws and one count of witness tampering. Higa was convicted of the conspiracy and one count of aiding and assisting in the preparation of a false tax return for one of Guirguis’ business entities.
According to prosecutors, the crimes all focused around Guirguis and his desire to divert business profits from his business for his personal use without paying the appropriate amount of federal tax. When the IRS determined that Guirguis’s companies hadn’t been properly paying employment taxes, they initiated the collection process. That’s when Guirguis and Higa sprung into action and concealed the true ownership of property in order to thwart the government’s efforts to collect on Guirguis’s tax debt.
Some of Guirguis and Higa’s efforts included transferring ownership of real estate away from Guirguis and having bookkeepers alter the books to hide the transfers. Additionally, Guirguis was convicted of intentionally tampering with at least one witness after his prosecution had begun.
When the pair’s sentencing hearing commences next year, Guirguis faces decades in prison while Higa faces up to 8 years. In addition to a prison sentence, each faces a term of supervised release and financial penalties such as fines, back-taxes, penalties, and interest.
When a taxpayer receives word that their tax return is being audited or that a criminal tax investigation has been initiated, many dreadful thoughts come to mind. Everyone has seen news stories about celebrities going to prison for failing to file or properly pay income taxes. If it can happen to them, it can happen to me, taxpayers often think.
Although an experienced tax attorney cannot completely eliminate the chances of a matter escalating to the point of a criminal prosecution, they can significantly reduce them. When the IRS examines a tax return, their agents have received extensive training on how to sniff out issues that may indicate fraud has occurred, these tale signs are called “badges of tax fraud”. Furthermore, those agents are trained to ask questions that could result in incriminating statements that can be used in a criminal prosecution. Having a tax defense attorney present during all critical interactions with the IRS or state taxing authority can mean a world of difference. The sooner that a taxpayer engages a tax attorney, the better.
A criminal tax defense attorney who is also dually-credentialed as a CPA has both the technical tax skills needed to craft an effective tax strategy as well as the legal education that is critical in dealing with the government in matters that could result in criminal prosecution.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have assisted taxpayers from all walks of life in a variety of tax situations. From income tax audits to business or employment tax investigations, our zealous advocates are ready to assist in the development of a strategy that will keep you and your family top of mind. Although it isn’t impossible to completely avoid an IRS or state tax audit, it is possible to handle it in a manner that will not leave you up at night wondering whether a prison sentence is in your future. Contact the Tax Law Offices of David W. Klasing today online or by phone at (800) 681-1295 for a reduced-rate consultation.
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Here is a link to our practice overview video on warning signs than an audit has gone criminal.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, and Sacramento.