Saturday, April 21, 2007

Investment Banker Convicted of Tax Evasion

Investment banker Richard Josephberg was convicted of 21 counts of tax evasion, conspiracy, and health care fraud for his failure to pay taxes owed since 1977.  In the mid-1980s, the IRS determined that Josephberg owed over $1.5 million in taxes from the illegal tax shelter scheme his firm sold, and over the next fifteen years he took various measures to avoid paying the taxes, including putting assets into accounts in the names of his children, one of whom was an infant at the time.  The jury also convicted Josephberg of failing to file his taxes for a three-year period and conspiracy.  Interestingly, one tax evasion count alleged that Josephberg paid his housekeeper/nanny in cash to avoid filing the required tax reports and paying FICA and social security taxes for her.  This is one of the few times the failure to pay the "nanny tax" -- made famous in 1993 when a nominee for Attorney General was tripped up on the same issue -- has been the basis for a criminal charge.  The last count, which seems to be the icing on the cake, accused Josephberg of lying to his investment firm's health insurer that his wife was an employee of the company and therefore covered by the health plan.  Anything to avoid a co-payment, I guess.  A press release issued by the U.S. Attorney's Office for the Southern District of New York (here) discusses the conviction, and the indictment is below. (ph)

Download us_v_josephberg_indictment.pdf

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