Earlier this month, the Newark office of the IRS Criminal Investigation Division (IRS-CI) announced the guilty plea of defendant Patrick Franconeri, 57, who confessed to failing to report more than $1.3 million in income in 2014, thereby illegally avoiding a tax liability of over $558,000. Franconeri, who owned several construction companies in New Jersey, also admitted to utilizing check-cashing services to disguise and conceal his transactions. In addition to committing a felony tax crime, Franconeri engaged in bankruptcy fraud, concealing substantial assets from court officials while his Chapter 7 case was in progress. If you have unreported income, you are advised to contact an unfiled tax return lawyer immediately. It may still be possible to limit your criminal tax exposure or reduce the civil penalties you face, but only if you are proactive and quick-moving.
Franconeri’s taxable income for 2014 totaled approximately $1,362,950. However, none of this income was reported to the IRS, as Franconeri failed to file a tax return that year. Because Franconeri failed to file a return, the IRS was unable to calculate a tax assessment, causing a tax loss of $558,439 in unpaid income taxes. This willful failure to file a return and pay taxes led to Franconeri’s plea of guilty to tax evasion.
In addition to willfully failing to file a return or report and pay taxes on his income for 2014, Franconeri also participated in bankruptcy fraud after filing for Chapter 7 in 2010. When an individual files for Chapter 7 bankruptcy, he or she is required to disclose financial assets to a court-appointed bankruptcy trustee, so that the assets may be disbursed among the debtor’s creditors. In some cases, debtors attempt to undervalue or conceal these assets in order to avoid losing them to creditors. This constitutes bankruptcy fraud and can lead not only to dismissal of the bankruptcy case, but furthermore, serious criminal charges.
You may have noticed several references to Franconeri’s willfulness. Willfulness, or the state of acting intentionally, is a crucial component of criminal tax charges, which generally require prosecutors to show that alleged tax offenders acted knowingly and intentionally. Unfortunately, even sincere tax errors can be misinterpreted as “willful” by overzealous or inexperienced investigators, making aggressive legal representation essential. If a tax mistake was accidental rather than “willful,” the taxpayer may still face costly fines, but no prison time. However, proving non-willfulness is a complex process demanding careful strategy, with the IRS providing scant guidance on the term “non-willful.” It is in your best interests to be represented by a seasoned tax defense attorney if you are facing tax fraud charges, an IRS investigation, or tax fraud penalties of any kind.
As of June, Franconeri has been scheduled for sentencing on September 16, 2019. At sentencing, he may face years of prison time and supervised release, in addition to fines and IRS restitution. Each offense charged in Franconeri’s case is punishable by up to five years in prison. These maximum five-year sentences are established by the federal statutes for tax evasion (26 U.S. Code § 7201) and bankruptcy fraud (18 U.S. Code § 157).
Addressing Franconeri’s case, John R. Tafur, Special Agent in Charge for the Newark field office of IRS-CI, stated, “Fraud and dishonesty in bankruptcy court undermines the integrity of these important proceedings. Intentionally concealing assets, failing to accurately report income and failing to file tax returns is criminal activity,” he warned, “that will not be tolerated.” For proof, one need only look at federal statistics on tax-related convictions and sentencing.
If you have unfiled income tax returns, undisclosed offshore assets or accounts, or unreported domestic assets or income (including cryptocurrency), you are at risk for major civil and/or criminal penalties. Take action now by consulting with a tax evasion defense attorney. At the Tax Law Office of David W. Klasing, we are tax evasion defense lawyers with extensive experience representing individuals and entities in federal tax audits, felony tax evasion cases, and civil tax disputes with the IRS. We are here to help you strategize effectively and avoid self-incrimination, fighting your penalties and negotiating with the IRS on your behalf. Contact us online right away to arrange a reduced-rate tax consultation, or call the Tax Law Office of David W. Klasing at (800) 681-1295 to speak with an experienced attorney-CPA today.
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.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here:
Questions and Answers on Unfiled Back Taxes
Questions and Answers for Criminal Tax Representation