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Wealthy Couple Pleads Guilty in Tax Fraud Case

Couple from the Upper East Side Pleads Guilty to Tax Fraud Case

tax fraud caseJust in time for the federal tax filing deadline, a wealthy couple living in Manhattan’s pricey Upper East side has pleaded guilty in tax fraud case.

Jeffrey Stein, a 58-year-old vascular surgeon, and his wife Marla Stein, a 52-year-old attorney, pleaded guilty to charges of tax fraud before a federal judge on Tuesday, April 14th.

The couple admitted to claiming hundreds of thousands of dollars in bogus deductions, in order to reduce their annual payments, for years. They also admitted to using stolen identities, including those of disabled veterans, to fool IRS examiners when they were audited.

“It is inexcusable when financially successful individuals, with the resources to meet their tax obligations, defraud the tax system,” said Shantelle Kitchen, an IRS special agent-in-charge. “By doing so, they increase the burden on law-abiding American taxpayers, effectively forcing them to make up the difference.”

The Steins will be sentenced for their tax fraud on July 28th.

Court documents show the extent of the tax fraud, including “wholly fictitious” expenses for labor and transcription that were handed over to the Steins’ accountant between 2009 and 2012. The Steins also reportedly inflated the cost of travel, auto, and food expenses, as well as entertainment costs while on business trips.

Marla Stein also filed fraudulent expenses for advertising and contract labor “which were, in truth and fact, never incurred or paid,” according to the court documents.

The couple also failed to claim a domestic employee who received $15,000 per year to cook, clean, and provide other household services for the Steins.

In February 2013, the couple was contacted by the IRS regarding an audit of their 2010-2011 taxes, and the couple created false documents as part of their tax fraud. Jeffrey Stein reported manufactured invoices for $126,452 worth of contractors’ costs for modifications to his medical practice. Four of those he claimed to have paid were disabled veterans who received medical work from him, so he had identification for them.

Marla Stein also took receipts for photographer and videographer services she had hired for family members’ religious services, and altered the documents so that they appeared to have been hired for her law practice.

With their guilty pleas, Jeffrey faces 5 years in prison for tax evasion, and 3 years for obstructing the IRS; Marla faces 3 years for similar charges. They both face hundreds of thousands of dollars in fines for the tax fraud.

The Strom Law Firm Defends Suspects Charged in Tax Fraud Cases

Tax fraud cases and tax evasion are serious charges and if you face tax fraud accusations, you could feel lost or guilty. However, it is important to remember that you are not automatically guilty, and you still have rights even after you have been charged.

You could be investigated for any number of reasons, including:

  • failure to pay taxes
  • submitting false information
  • directing another to submit false information

If an IRS investigator has approached you, you do not have to answer any of their questions without representation. The South Carolina tax allegations defense attorneys can help. We offer a free, confidential consultation to discuss your tax fraud charges, so contact us today. 803.252.4800

About Pete Strom

Defending criminal charges including drug crimes, DUI, CDV, mail fraud, wire fraud, bank fraud, computer crimes, money laundering, and juvenile crimes, Pete also handles Federal and State investigations. Representing individuals in Civil Matters including Class Actions, Personal Injury, Qui Tam Actions, Defective Products, Nursing Home Neglect, and Professional Licensing Defense cases. Joseph Preston “Pete” Strom, Jr., the managing partner at Strom Law Firm, L.L.C., has been fighting for justice since 1984.

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