Texas Lawyer Faces Fines, Jail Time for Massive Offshore Tax Scheme

No one is above the law, and no one can outwit the IRS forever, even lawyers. A grand jury recently returned an indictment against a Texas lawyer for allegedly hiding more than $18 million in offshore bank accounts. Learn more about the case against the lawyer, and contact a dedicated Texas tax fraud defense attorney with any questions or for help with an IRS tax problem in Dallas or Tyler, Texas.

Offshore tax evasion scheme

According to a press release from the Department of Justice, a federal jury sitting in Houston returned an indictment charging a Texas lawyer with one count of conspiracy to defraud the U.S. and three counts of tax evasion. Prosecutors allege the defendant conspired with someone else to hide more than $18 million of the co-conspirator’s untaxed earnings in foreign bank accounts located in the Isle of Man. They disguised the funds as stock purchases by U.S. corporations owned by the defendant and his co-conspirator. The defendant was paid more than $4.8 million for helping to hide his co-conspirator’s untaxed earnings.

Returning an indictment is not the same as proving ultimate guilt. A returned indictment means a grand jury believes charges should be brought, which allows the prosecution to move forward. The defendant is still presumed innocent until found guilty. If convicted, the lawyer faces up to five years in prison for conspiracy, and another five years for each of the three counts of tax evasion.

Criminal proceeds are taxable

Many people do not realize that even criminal earnings are technically taxable. Obviously someone who has committed a crime does not want to tell the government as much by filing taxes on the criminally-obtained profits. As a result, the DOJ will sometimes tack on tax evasion charges on top of other charges or instead of other crimes that may be harder to prove. In this case, the defendant lawyer is also charged with evading taxes on the $4.8 million he earned in the criminal conspiracy, which he allegedly did by withdrawing the funds as claimed non-taxable loans or returns of capital.

If you’re facing a complicated tax issue involving back taxes, tax fraud, tax evasion, or false returns, get skilled legal help with your case from the Texas tax lawyers at the Scammahorn Law Firm at 903-595-1000, with offices in Dallas and Tyler.