NY Lawyer Gets 18 Months for Hiding Cash from IRS – Los Angeles Income Tax Planning & Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on December 2, 2014

On November 21, Stanley L. Cohen, a New York criminal defense lawyer, was sentenced to 18 months in prison for concealing millions of dollars in cash from the Internal Revenue Service (IRS). Judge Norman A. Mordue of the US District Court for the Northern District of New York further ordered Cohen to pay all taxes, interest, and penalties due for tax years 2005-2010. However, Cohen apparently lacks the funds to pay any fine, according to court records.

Cohen was charged in December 2013 with concealing more than $3 million in legal fees paid in cash. On April 14, Cohen pleaded guilty to one count of obstructing and impeding the IRS, and then on May 1, in a related case, pleaded guilty to two misdemeanor counts of willful failure to file tax returns. The two cases were then combined for sentencing.

According to the IRS investigation, Cohen ran his practice on a cash basis. Although Cohen filed for extensions and paid modest amounts of tax during tax years 2005 through 2010, he never filed a return. On his last filed return, in 2004, Cohen claimed gross receipts of $289,000. However, investigators uncovered deposits of more than $426,000 and determined that Cohen essentially failed to keep any record of the fees he charged clients. He also failed to file either a Form 1099 or Form W-2, Wage and Tax Statement, for a law office assistant.

From 2006 through to 2008, Cohen deposited $504,000 in cash in a safe deposit box, according to bank records. From 2004 to 2010 Cohen deposited a total of more than $2.26 million in cash in various financial accounts while taking care to deposit most of the cash in amounts less than $10,000, thereby avoiding currency transaction reporting requirements.

According to prosecutors, Cohen persuaded his clients, most of whom were on the Mohawk Akwesasne Reservation along the New York Canadian border, to pay him cash by wire transfer. One Speedway Convenience Store located on the reservation was used to make more than $643,000 worth of wire transfers to Cohen’s account between October 2004 and December 2008.

Bottom line: despite the severity of the crime, Cohen appears to have gotten off relatively lightly in this case.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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