Questions? Feedback? powered by Olark live chat software

Michigan Attorney to Plead Guilty to Mail and Tax Fraud

Swiss Bank Program
Three New Institutions Join Swiss Bank Program
November 30, 2015
Examination tools
New Tools For IRS Agents Sophisticates Tax Examinations
December 8, 2015

Michigan Attorney to Plead Guilty to Mail and Tax Fraud

MIchigan Attorney

Michigan Attorney to plead guilty to mail and tax fraud

Most Americans have imagined what it would be like if they won the lottery. The thought of finding yourself millions of dollars richer overnight can elicit daydreams of all of the ways that such money could be spent. For many, a lottery win will remain a dream. A select few will experience the joy of being a lottery jackpot winner. But some won’t leave the matter to chance. The latter option was a path taken by a recently disbarred Michigan attorney when he stole over a million dollars from an elderly client with Alzheimer’s disease.

Michael Aho Kennedy, 67, recently came to an agreement with prosecutors and is expected to plead guilty in federal court to one count of mail fraud and one count of tax fraud. According to a press release by the Department of Justice, Kennedy served as the trustee of the trust of former client, Virginia Weber. The Department of Justice alleged that Kennedy embezzled over a million dollars from Weber’s trust between 2006 and 2012. Kennedy used Mrs. Weber’s stolen funds to fund several lavish purchases, such as exotic vacations, a horse, and improvements to his home.

The Department of Justice further alleges that Kennedy created false statements that were sent to Mrs. Weber that purported to show that her trust continued to hold over a million dollars. In reality, a bank statement could have shown that the trust account had been drained and the money funneled to Kennedy’s personal bank account. Kennedy was indicted by a federal grand jury back in October and faced nine federal charges. Although Kennedy’s agreement will only require him to plead guilty to two charges, he still could face up to 20 years in a federal prison.

Kennedy is being charged with tax fraud because when he embezzled Mrs. Weber’s money, he failed to include it on his federal tax return.  It is a little-known fact that all income must be included on a taxpayer’s return, no matter the source of the income. Thus, someone that has engaged in illegal behavior that increases their wealth must reflect that income on their federal taxes at the end of the year.

In addition to a lengthy stay in a federal prison, Kennedy has agreed to pay over a million dollars in restitution. The amount includes the money that he spent on vacations and other personal property, and also includes the increased equity in his home from the improvements that were financed by Mrs. Weber’s trust funds. To make matters worse, Kennedy was recently disbarred from the practice of law in Michigan and is facing state charges relating to the embezzlement activity at issue in this case.

Lawyers are commonly trusted to keep the money of clients safe. Although some attorneys succumb to the temptation of improperly accessing a client’s funds, the great majority of attorneys take their fiduciary duty extremely seriously. If you are in need of an attorney to assist you with trust or estate services, news of rogue lawyers that commit fiduciary crimes should provide ample motivation to make sure that your attorney is truthful and transparent.

The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in assisting clients with a plethora of fiduciary-related services, such as domestic and international trust and estate planning and executor/trustee representation. No matter the issue, our team of zealous advocates is ready to represent you and your family. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.