It isn't uncommon that a major civil tax dispute leads to a criminal charge. The stakes are high in these cases, as a tax crime conviction can result in heavy restitution and prison time.
A Pennsylvania man was recently sentenced to almost three years in prison after prosecutors accused him of hiding income and assets from federal authorities. The man had already pleaded guilty in 1996 to charges related to tax crimes and bank fraud, and as part of that plea agreement, he was required to disclose his income.
In 2011 prosecutors accused him of not fully disclosing his income and assets, and if convicted, he could have been sentenced to prison for up to 22 years.
But mistakes on the part of the prosecution led to those very serious charges being dropped. That turn of events came after the defendant was able to show that the federal prosecutor had hired an attorney who had previously engaged in discussions regarding the defendant's criminal case. In other words, the accused man's attorney-client privilege had been violated.
Instead, the man was accused of the lesser charge of obstructing tax collection efforts, and a federal judge handed down a 35-month prison sentence. The prosecution sought to have the defendant pay more than $10 million in restitution for penalties and back taxes, but the judge decided that the defendant didn't have the funds to pay, so no restitution was ordered.
When federal prosecutors accuse an individual of tax crimes or some other white collar offense, the defendant should expect that the prosecution will pull out all the stops. Still, there may be an effective defense strategy. To learn more about defending against tax crime allegations, please visit our page on white collar crime.
Source: Pittsburgh Post-Gazette, "Pittsburgh white-collar criminal Michael Carlow sentenced," Len Boselovic, Nov. 15, 2013