Stepping on the Little Guys

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Fraudsters are very experienced in stepping on the “little guys.” In an ironic twist, a Philadelphia, Pennsylvania man – who was deemed a pioneer in standing up for “the little guys” – actually took advantage of them – American tax-paying citizens and the U.S. government (one very large guy) by committing tax fraud with his wife. (As you might expect, the two spent extra income on a luxurious lifestyle.)

The Philadelphia man was a lawyer who secured recoveries for Holocaust survivors and went against large corporations that took advantage of the so-called “little guy.” (It just makes you want to stand up and cheer until you hear the rest of the story.) His wife, who was also a lawyer, helped hide a six-figure tax debt, then spent tens of thousands of dollars on clothes, cosmetics, jewelry, salons, private clubs and trips abroad.

The article explains that when the Internal Revenue Service (IRS) attempted to collect the overdue taxes, the husband hid the money in his children’s bank accounts to avoid being taxed. The husband obtained a loan to pay back the debt but lied about it to investigators. He also fibbed about a bank account where he deposited his $300,000 annual salary over three years. (As a lawyer, you would think he would know that it is kind of hard to hide a bank account with such a large balance.)

The wife’s defense attorney stated that she failed to pay taxes over multiple years because she was experiencing marital troubles at the time. (I’m guessing that her marital problems have gotten worse since that time.) Her attorney explained that she made a modest income, but that her husband’s large income increased her tax exposure. (So, she did not pay the taxes. She also did not have a second thought about spending taxpayer dollars on herself.)

 The defendants, who knew better than to hide their money and spend it on themselves, bankrolled a lavish lifestyle on the backs of the ordinary American taxpayer who pay their taxes in accordance to the law. But fortunately, the tax cheats were caught and held accountable for their crimes.

The not-so-happy married couple pleaded guilty to tax fraud on the eve of their trial for intentionally concealing their income and evading taxes. (At this point, they owed $444,225 for five years of unpaid taxes.) When sentenced, the husband faces a maximum of five years in prison, three years of supervised release and a $100,000 fine. (He’s hoping the judge will consider the previous good work he did on behalf of the “little guys.”) His wife, who is described as a “devoted mother of two children,” could get a maximum of two years in prison, one year of supervised release and a $100,000 fine. Congratulations to the IRS for preventing these two greedy fraudsters from stepping on any more little guys.

Today’s “Fraud of the Day” is based on an article entitled, “Married Philadelphia Lawyers Plead Guilty to Tax Fraud on Eve of Trial,” published by The Legal Intelligencer on November 7, 2018.

Two Philadelphia lawyers have pleaded guilty to tax charges on the eve of trial, Philadelphia-based U.S. Attorney William McSwain announced Tuesday afternoon.

Edward Millstein and Susan Halpern, who are married, pleaded guilty to three counts of tax fraud charges before U.S. District Judge Cynthia Rufe of the Eastern District of Pennsylvania on Tuesday. Prosecutors alleged that the money that should have gone to their six-figure tax debt was instead hidden and used to splurge on luxuries.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.