Last week, a federal grand jury sitting in Springfield, Massachusetts, indicted Kevin M. Kennedy with wire fraud, money laundering, filing a false tax return, and theft concerning a federally funded program. This story is a reminder to taxpayers that investigations can snowball into larger and more complex criminal tax proceedings. Thus, any taxpayer who finds themselves in the crosshairs of either a state or federal tax examination, or other investigation, should seek the counsel of an experienced tax defense attorney to ensure that the situation is contained and necessary steps to mitigate potential damage are taken.
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Defendant’s Company Trust by the City, Skimmed Money For 7 Years
According to a Department of Justice press release, Kennedy, a resident of Massachusetts, was the owner and operator of Kennedy Golf Management Inc (“KGM Inc.”). KGM Inc. was under contract to manage the two public golf courses owned by the City of Springfield in Massachusetts. As a part of its contracted duties, KGM Inc. was to take care of the green fees, as well as the fees related to the rental of the city-owned golf carts.
Federal investigators discovered that Kennedy had embezzled funds from both golf courses, by stealing directly out of the cash registers at the facilities. Prosecutors allege that Kennedy physically skimmed both green fees and golf cart rental proceeds for the 7 year period between 2010 and 2016. Kennedy allegedly spent the illegally acquired funds for lavish personal expenses, such as the construction of private homes around Massachusetts. According to an IRS criminal investigation, Kennedy did not report the stolen income on his 2010 through 2014 federal income tax returns, as required.
Defendant Accused of Working with Construction Company to Avoid IRS Detection
Additionally, the indictment returned by the grand jury charges that Kennedy conspired with a local construction company to obstruct and impede the IRS and its collection of taxes. Kennedy allegedly worked with Kent Pecoy, the owner of Kent Pecoy and Sons Construction Inc. to pay for the construction of his personal homes in cash, most of which was not deposited into a bank account. When cash was deposited into a bank account, all deposits were made in increments of less than $10,000 so that federal bank reporting laws were not triggered. Note: this is a separate crime called structuring.
A trial date has not been set, but if Kennedy is convicted, he could spend up to 20 years in prison for each count of wire fraud and money laundering, five years in prison for conspiracy, three years in prison for each count of filing a false tax return, and 10 years in prison for each count of theft concerning a federally-funded program. Additionally, Kennedy will likely also be sentenced to serve a term of supervised release and be ordered to pay restitution.
The above story is a testament to the helpfulness of an experienced tax defense attorney whenever a taxpayer finds themselves in legal trouble that could affect tax reporting or liability. We have reported several times before that just because a taxpayer is being investigated for a non-tax related crime, does not mean that there will not be tax implications.
Likewise, when the IRS or state taxing authorities open an inquiry into a taxpayer’s returns, there is a risk that other non-tax related crimes may be added to the purview of the investigation. An experienced tax defense attorney will work to contain a tax examination to the specific facts and circumstances at issue and work to mitigate the potential negative repercussions that can be associated with the inquiry.
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Contact an Experienced Tax Attorney Today
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing a diverse group of taxpayers. From individuals to middle market businesses and beyond, our team of zealous advocates will assist in the development of a strategy to help you reach your specific goals and objectives. Whether you are under a tax examination or are in need of tax planning advice, 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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