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If you read our tax law blog on a regular basis, you may recall an article we published back in February profiling the account of Oklahoma resident Shawn Christopher Gorrell. In case you don’t feel like reading the original article in full, allow us to refresh your memory with a quick synopsis. After being fired from his insurance job, Gorrell launched his own investing firm. However, instead of investing client funds in accordance with their agreement, Gorrell collectively cheated his four clients out of $2.5 million, using the money to fuel his two hobbies: poker and day trading. When the defrauded investors began to catch on, Gorrell inexplicably reacted by pretending to have cancer and fleeing the state. Unsurprisingly, that strategy failed to deflect federal prosecutors, who not only charged Gorrell with wire fraud, but later, used a superseding indictment to add three counts of tax evasion. At the time of our original article, Gorrell had been scheduled for sentencing on April 23, 2018. With that date now behind us, our tax evasion lawyers have updates on his fate – which could be shared by any taxpayer who engages in similar tax and financial crimes.
Just as originally scheduled, Gorrell was sentenced on Monday, April 23, appearing in U.S. District Court for the Northern District of Oklahoma before Chief U.S. District Judge Gregory Frizzell, who handed down the defendant’s verdict – guilty – three months earlier on January 23. At sentencing, Frizzell had tough words for Gorrell – and, as our criminal tax defense attorneys will discuss momentarily, an even tougher sentence.
Unfortunately for the defendant, Frizzell was unimpressed by Gorrell’s requests for a light sentence, calling defendant’s admissions that he “fell short” and spent “way too much time in casinos” a “remarkable understatement” which failed to reflect the true character of what was, in fact, a “carefully calculated scheme” involving wire fraud and tax evasion.
Assistant U.S. Attorney Kevin Leitch was less reserved in his commentary, writing memorably in the sentencing memorandum, “On his pilgrimage through life, Shawn Gorrell reached the hinterlands of integrity and came to the bewitching waters of fraud. There he did not hesitate. Turning his back on all the good things of his past, Gorrell jumped into the strong currents of deception with both feet and grabbed on hard to the shark-of-a-scheme that voraciously consumed the financial and mental well-being of his prey.”
For context, the investor least impacted by the “shark-of-a-scheme” lost over $150,000. Another lost $1.5 million: about 10 times that amount.
Unsurprisingly, Gorrell did not receive the leniency he requested – unless, that is, your idea of a “lenient” sentence is 64 months, or five years and four months, in federal prison. Even upon leaving prison, Gorrell will remain under the watchful eye of the criminal justice system, having been sentenced to three years of supervised release. In addition to his sentencing and supervision, Gorrell also faces financial consequences for his crimes, having been ordered to pay over $2 million.
As the adage goes, “Crime doesn’t pay” – but convicted tax offenders certainly do. If that isn’t enough to make taxpayers nervous, keep in mind that we are currently at the height of audit season, which begins as the Internal Revenue Service (IRS) works its way through the millions of income tax returns received during February, March, and April.
If you feel the information you supplied on your 2017 and prior tax returns was in any way inaccurate or incomplete, it may only be a matter of time before you receive that dreaded audit notice from the IRS. If you or your spouse is facing such a situation, the best approach is to consult with an experienced tax attorney who is ready to negotiate aggressively with the IRS – and if necessary, defend felony cases in federal court.
Legal help is only a phone call or online contact form away. However, the longer you wait to discuss your concerns with a tax audit lawyer, the weaker of a position you will be in to bargain with the IRS – or to mitigate your penalties effectively. For a reduced-rate tax consultation, contact the Tax Law Office of David W. Klasing online right away, or call our law offices at (800) 681-1295.
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 appointment only satellite offices in San Bernardino, Santa Barbara, Panorama City, San Jose and Oxnard! You can find information on all of our offices here.
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