We represent clients from all U.S. and International locations regarding Federal Tax and California Issues.
A “snake oil salesman” is an older expression that referred to the quack salesman who sold you “health products”—snake oil— knowing full well that it was a farce. In other words, it referred to a fraudster, a phony, or a shyster. This entry is about the government’s recent success in fighting fraud on two fronts.
The FBI announced a huge victory—a dual conviction for healthcare fraud and tax evasion; and the IRS determined that the defendant’s back taxes (with interest and penalties) is $1,894,258.71. One Gary Anusavice, who also went by “Andrus” and “Francis” (hereafter “Gary” for simplicity) and resided in Rhode Island, was the defendant convicted for healthcare fraud and tax evasion for his involvement in a $20 million Medicaid fraud scheme. He was convicted in 1998 and prevented from engaging in business with the healthcare industry, but he concealed his involvement from 2008 to 2011 through the use of corporate names. Yet, through careful investigation, the authorities uncovered his fraud.
He was actively involved in managing the dental clinics, he recruited dentists, even oversaw the hiring process. But he tried to keep his involvement hidden—and he established various corporate entities to conceal his name. Then, rather than having the business make a distribution to him as an owner/shareholder/member, he had the business directly purchase personal use assets for him—including his personal residence. He also received approximately $3.3 million in income from these clinics but, surprise, he failed to report it. His dual frauds—healthcare and tax—have resulted in possibly getting him 15 years imprisonment.
He was also convicted in 1997 (but in Massachusetts) for submitting false health care claims. Gary failed to pay income on a substantial amount of money he received in his involvement in three Connecticut dental clinics. In addition, it is estimated that he siphoned millions from the Medicaid program. The IRS’s criminal investigation division explained that “when a health care provider steals from the government via Medicaid Fraud, the money is part of the untaxed underground economy.”
Many people were involved to uncover his tax fraud and healthcare fraud—from the FBI, the IRS’s Criminal Investigation, and Connecticut’s Attorney General’s Office. The Attorney General’s Office communicated that they reached a settlement with Gary: He would pay a whopping $9.9 million.
Gary’s case is illustrative of how ordinary fraud typically results in severe tax fraud penalties as well. Ordinarily, those who are engaging in illicit enterprises aren’t reporting their income for obvious reasons. This leads to the imposition of steep civil and criminal tax penalties when those criminal activities come to light. If you are currently being prosecuted or under investigation for fraud or any other illegal income producing activity, you should contact the Law Offices of David W. Klasing immediately to discuss your options regarding further civil and criminal tax liability.