Via Luke Ford: Justice Department sues local attorney, CPA for tax fraud


Justice Department sues local attorney, CPA for tax fraud

From http://fox5sandiego.com:

via

http://www.lukeford.net/blog/?p=79586

SAN DIEGO — The federal government has filed suit in San Diego against a former attorney and certified public accountant to bar him from promoting and implementing tax fraud schemes and preparing tax returns for others, the U.S. Department of Justice announced Monday.

The lawsuit alleges that Lawrence Preston Siegel — also known as Larry Lave, Yehuda Lave and Larry Easy — falsely represented himself as a licensed attorney and CPA in order to solicit business for his tax practice.

According to the civil injunction, Siegel pleaded guilty in 1994 to one count of tax evasion and two counts of subscribing false tax returns. He resigned from the California bar that year, lost his CPA license in 1997 and never regained either accreditation.

The complaint alleges that following his release from federal prison in 2001 for additional convictions, Siegel established a tax practice and stated online that he was a “combination of a tax lawyer and CPA who is also a rabbi trained in spirituality.”

Siegel, the complaint alleges, told people his “goal as a spiritual rabbi, tax attorney and CPA is to save people money without going to jail,” claiming he could do so “legally and morally under the Torah.”

Siegel allegedly advised his customers falsely that they could establish companies in Nevada and treat their California homes as out-of-state corporate offices.

Siegel also falsely claimed that doing so would transform a vast array of non-deductible personal expenses into tax-deductible business expenses and boasted about this tax fraud scheme in emails, including one in which he falsely claimed that his customers were entitled to free housing as tax-free compensation from their out-of-state companies, according to the suit.

Additionally, Siegel falsely advised his customers to enter into sham license agreements to purportedly lease their professional skills and expertise to the out-of-state companies Siegel established for them, the government alleges.

Under these license agreements, the companies paid royalties to the customers in exchange for use of the customers’ professional skills and expertise, according to the complaint. Siegel allegedly promoted and implemented this scheme to mischaracterize income customers received from their out-of-state companies, which is subject to employment taxes, as royalty payments, which Siegel falsely claimed as exempt from employment taxes.

The complaint alleges that, in conjunction with his tax-fraud schemes, Siegel prepared customer tax returns and in some instances filed tax returns without obtaining his customers’ permission.

In preparing returns, Siegel falsely claimed customers’ personal purchases — including ones at Tiffany & Company and Louis Vuitton, and with Royal Caribbean Cruise Lines and Princess Cruise Lines — as deductible business expenses, according to the suit.

Siegel attempted to conceal these false deductions from the Internal Revenue Service by reporting them as large expenses for “supplies” or “medical records,” according to the government’s complaint.

Siegel also allegedly attempted to delay and obstruct IRS examinations of his customers, providing false corporate documents in order to deceive auditors, producing bogus contracts to auditors and lying to IRS officials when asked to confirm information on behalf of his customers, according to the lawsuit.

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