Jack Stephen Pursley is a former attorney from Houston, Texas. In 2019, he was sentenced to 24 months in prison for tax evasion and conspiring to defraud the United States. However, the Fifth Circuit remanded his case for retrial because of errors made by the original court.
Pursley closed his case on March 28, 2023, by pleading guilty to one count of conspiracy. It was a special type of plea deal. If the court accepted the plea agreement, the sentencing provision would be binding. If the court rejected the plea agreement, then Pursley would have the opportunity to withdraw his guilty plea.
If you have been accused of committing tax crimes, get help from our Dual Licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by calling (800) 681-1295.
Pursley’s Original Conviction for Tax Evasion
In 2019, Houston lawyer Jack Stephen Pursley was convicted of tax evasion and conspiring to defraud the United States. Pursley had conspired with one of his clients to repatriate over $18 million in untaxed earnings that the client had acquired through his company called “Southeastern Shipping.” Evidence presented at trial demonstrated that Pursley knew his client had not paid taxes on this income, so the attorney designed and enacted a scheme to transfer the funds from Southeastern Shipping’s bank account in the Isle of Man to the United States. The Houston lawyer helped hide the financial transfers from the Internal Revenue Service (IRS) by disguising them as stock purchases in domestic corporations controlled and owned by the client and Pursley.
For his role in the fraudulent scheme, Pursley obtained over $4.8 million in addition to a 25% ownership interest in his client’s ongoing business. Furthermore, in 2009 and 2010, Pursley evaded his tax obligations related to these payments by withdrawing the money as supposed returns of capital and non-taxable loans. The attorney used the illegally acquired funds to purchase an additional property in Houston and a vacation home in Vail, Colorado.
For his crimes, Pursley was sentenced to 24 months in prison. Additionally, he was ordered to serve 2 years of supervised release and pay $1,788,753 in restitution to the government.
Appeals Submitted Challenging Pursley’s Conviction
Pursley challenged his conviction by raising multiple issues on appeal. First, he argued that the indictment against him was brought outside of the statute of limitations. Regarding the conspiracy conviction, Pursley asserted that the trial court made a mistake by not giving an instruction that it must find one overt act within the statute of limitations. Finally, in regard to the tax evasion conviction, he suggested that the trial court erred by not offering an instruction that it must find one affirmative act within the statute of limitations.
Simply put, Pursley asserted that the case filed against him was not brought to court on time. He argued that overt and affirmative acts proving his guilt for the alleged offenses occurred outside the applicable six-year time window established by the statute of limitations.
Ultimately, the Fifth Circuit remanded Pursley’s case for retrial on the original counts.
Pursley Enters One Count Plea Deal
Finally, on March 28, 2023, Pursley entered a plea deal for one count of conspiracy. It is not unusual for people accused of tax evasion to plead guilty to conspiracy. In this case, it is possible that the IRS dropped tax evasion charges and gave up the opportunity for a civil fraud penalty in order to prevent further commotion. Establishing the civil fraud penalty would have been expensive and time-consuming for the IRS because they prove that the penalty is justified by clear and convincing evidence.
Furthermore, the plea deal that Pursley entered was a special type of agreement where judges are constrained to accept or reject the terms. If the court accepts this type of deal, then the sentencing provisions are binding. If the court rejects this type of plea agreement, the defendant can withdraw their guilty plea. If the defendant does not withdraw their guilty plea, the outcome of their case can be less favorable than the one suggested in their plea agreement.
Open Pleas vs. Negotiated Plea Deals for Tax Crimes
Two main types of plea deals you can enter into are open pleas and negotiated plea deals. If you enter into an open plea deal, then you will plead guilty without any guarantees from the prosecution as to what the sentence will be. Some defendants choose to enter into open plea deals in hopes of receiving lighter sentences than the prosecution suggests.
On the other hand, if you enter into a negotiated plea deal, it means that you have reached an agreement with the prosecution regarding your sentence. Usually, in a negotiated plea agreement, the defendant will plead guilty to one or more of the charges they face in exchange for a lighter sentence. You can decide which type of plea deal is right for you by consulting with our Dual Licensed Tax Attorneys and CPAs.
Prison Sentences for Tax Evasion
Typically, those who cause the government to suffer greater amounts of tax loss will be given longer prison sentences. Tax loss refers to the total amount of taxes that defendants failed to pay. Still, other factors may be considered when assigning prison sentences for tax evasion. For example, defendants with lengthy criminal records may receive longer sentences.
If You Need Help with Your Tax Issues, Call Our Law Firm Today
Seek support from our Dual Licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by dialing (800) 681-1295.
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) 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, KovelCPAs 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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