Tax Fraud

May 6, 2021

Spirits, beer, and wine produce the LeVecke Corporation agreed to pay almost $29 million in compromise of claims by the Department of Treasury Alcohol and Tobacco Tax and Trade Bureau alleging violations of the Internal Revenue Code, including failure to timely file tax returns and failure to timely file and/or pay excise tax. TTB

April 30, 2020

The owner of dog training school Universal K-9, Inc., Bradley Lane Croft, has been sentenced to nearly 10 years in prison for defrauding the Veteran Administration’s GI Bill program of more than $1.5 million in connection with 185 fraudulent claims relating to 132 veterans.  Croft had been found guilty of providing false information on instructor names, certifications, and training to the Texas Veterans Commission, laundering money, and submitting fraudulent income tax returns for 2016 and 2017.  USAO WDTX

April 5, 2021

New York's Service Station Vending Equipment, Inc., which provides self-service, coin-operated air machines used to inflate automobile tires, and its principal, William McCabe, will pay $4.25 million to resolve an action initiated by a whistleblower under the New York State False Claims Act alleging that they evaded sales taxes, under-reported sales, and paid workers off the books.  NY

March 16, 2021

Southern California brewer Stone Brewing Co., LLC, will pay $1.8 million to resolve allegations that the brewery underpaid excise taxes by misapplying tax rates, and failed to timely file excise tax returns and related operational reports. TTB

March 11, 2021

Swiss bank Rahn+Bodmer Co. will pay $22 million to resolve allegations that it conspired with U.S. customers to evade their U.S. tax obligations by concealing their ownership and control of up to $550 million in undeclared funds held in R+B accounts.  The bank entered into a deferred prosecution agreement and will cooperate with further investigations, including of U.S. accountholders.  DOJ

March 2, 2021

Hedge fund manager Thomas E. Sandell has paid $105 million to resolve claims first brought by a whistleblower under the New York False Claims Act alleging that Sandell evaded tens of millions in state and local taxes by falsely claiming that $450 million in management and performance fees he recognized in 2017 were not earned for services performed in New York, despite the fact that his fund, Sandell Asset Management Corporation, operated in New York and represented to the SEC that New York City was its principal place of business.  In his effort to evade NY taxes, Sandell moved to London for a period of time, opened an office in Florida, and managed SAMC expenses through a shell company that he also owned and controlled, all while continuing to perform the investment services that generated the fee income in New York.  When Sandell’s accountant informed him that he would have to pay NY state taxes, he terminated them and retained a firm that took his preferred position.  The whistleblower will receive an award of $22.05 million, which is 21% of the government’s recovery. NY