As we step into the new year, let’s take a moment to review some of the most significant criminal tax cases that concluded in 2024. These cases highlight the serious consequences of tax evasion and fraud and serve as important reminders for compliance and due diligence.
1. Inflated Business Expenses and Fraudulent Tax Shelters
Defendants: Michael Elliott Kohn, Elizabeth Chollet, David Shane Simmons
Charged with conspiring to defraud the IRS and aiding in the preparation of false tax returns, this trio promoted a fraudulent tax shelter. They advised clients to take out life insurance policies that falsely covered income allegedly allocated to a charity, with the death benefit tied to business profitability. Simmons went further by underreporting his income on false tax returns. You can read more about the case HERE.
Outcome: Convicted, with up to 5 years’ imprisonment per charge. Simmons faces an additional 3 years for his false tax returns.
2. Concealing Illegal Gambling Proceeds
Defendant: Christopher Karasarides
Accused of helping his father hide money from an illegal gambling operation, Karasarides stored cash in a safe deposit box and falsified tax returns to cover up the income.
Outcome: Sentenced to 1 year and 1 day in prison, and ordered to pay $1.5 million in restitution.
3. Business Tax Evasion and Bankruptcy Fraud
Defendant: Robert Wayne Schlosser
Schlosser, from Minnesota, failed to pay taxes on business income from 2007 to 2019 and made false statements in bankruptcy filings and testimony. Click HERE to learn more about the case.
Outcome: Received a 1 year and 9 months sentence, a $25,000 fine, and must pay $279,897 in restitution.
4. Withholding Exemption and Non-filing of Returns
Defendant: Jonathan Michael
Charged with tax evasion and not filing income tax returns in the state of New Jersey, Michael claimed exemption from income tax withholding and did not file tax returns from 2014 to 2021.
Outcome: Sentenced to 2 years and 5 months in prison along with $378,844 in restitution.
5. Personal and Business Tax Evasion
Defendant: John Petrone
Petrone failed to file and pay personal and business taxes in Texas from 2014 to 2019, co-mingled accounts, and misled IRS officials.
Outcome: Awaiting sentencing, with a potential maximum of 5 years in prison.
6. Failure to Pay Over $2.4 Million in Taxes
Defendant: Milton C. Grimes
Charged with tax evasion and willful failure to pay taxes exceeding $2.4 million, LA Attorney Grimes attempted to thwart IRS collection efforts.
Outcome: Indicted, facing up to 5 years for tax evasion and 1 year for each count of willful failure to pay taxes.
7. Offshore Account Tax Fraud
Defendant: Rolf Schnellmann
Schnellmann helped U.S. taxpayers hide income and assets in offshore accounts.
Outcome: Plead guilty, facing up to 5 years in prison.
Navigating Tax Compliance with Expert Guidance
Understanding and navigating tax law complexities is crucial in avoiding the pitfalls evident in the cases we’ve discussed. As these instances demonstrate, the consequences of non-compliance can be severe, emphasizing the importance of informed and proactive tax management. At Kundra & Associates, our goal is to keep you informed and prepared. With a reach that extends across Maryland, Virginia, Washington, D.C., and internationally, our expertise in tax law provides you with the insights and support needed to manage your tax affairs effectively. For further discussion on how to ensure compliance and protect yourself against similar risks, reach out to us for a consultation!
