Taxable Talk

Two famous electronics companies. In fact, I used to work for Westinghouse (“You can be sure if it’s Westinghouse”). But that’s not the story here. Instead, it’s the usual tax evasion, with a twist.

>From the Pittsburgh Post-Gazette comes the story of Soviet nuclear reactors, theft of over $9 million in aid money from many countries, and tax evasion.

Mark Kaushansky is a former Soviet refugee, having emigrated from the Ukraine in 1979. He landed in Monroeville, Pennsylvania and went to work for Westinghouse. In the 1990s he met up with renowned Russian atomic scientist Dr. Evginey Adamov. Dr. Adamov was arrested in Bern, Switzerland at the bequest of the US Department of Justice, but was extradited to Russia. According to Kommersant, Dr. Adamov hasn’t admitted guilt in his trial for “…grand fraud of the organized criminal group and with the office abuse that led to enormous offenses.”

Mr. Kaushansky, though, has pleaded guilty to nine counts of tax evasion. The government alleges that he’s bilked the IRS out of $5 million. Defense attorney Fred Theiman is quoted by the Post-Gazette as saying, “A lot of assumptions made by the government are perfectly rational, perfectly logical and perfectly wrong.” The IRS says that the pair used shell companies that never filed tax returns to hide money. A judge will have to decide how much Mr. Kaushansky’s companies didn’t pay. I’ll let you know more when Mr. Kaushansky is sentenced.

Meanwhile, a Sylvania, Ohio attorney was sentenced after being found guilty of evading $321,000 in taxes. Joseph Weisberg will have five months at ClubFed to think about the errors of his ways. Mr. Weisberg used his client trust account to hide his income, and that’s not a good idea at all.

I’ve been under the weather the last two days, fighting a bout of the flu. That’s better than these individuals, including some doctors who should (one day) have a prescription to fight off the malady.

Dr. Steven Herman was a plastic surgeon, with a practice in Norwalk, Connecticut and Manhattan. I say “was” because he’ll be spending 20 months at ClubFed. Dr. Herman started by committing tax evasion; he took $883,000 from his medical practice and didn’t report the income. Then he asked friends and household employees to buy money orders payable to him at post offices. He would have them buy (typically) four $700 money orders, so that the $3,000 requirement for reporting wouldn’t happen. That’s a second felony, structuring. Finally, he billed a health insurance company for procedures that were cosmetic, but he told the insurance company that they were medically necessary. That’s a trifecta, and it earned Dr. Herman the prison time, $800,000 in a civil settlement to the IRS, $150,000 in restitution to the insurance company, $236,000 in forfeiture because of the structuring, and a fine of $60,000. You can read the story here.

Meanwhile, phony trusts snagged three in Morgantown, West Virginia. Dr. Max Harned and his wife were found guilty last November of hiding money in trusts; they face up to 25 years in prison according to this AP Story. And a forest service employee who hid $1.1 million in trusts faces nine years in prison. I missed the first story of Dr. Harned’s indictment last June. Dr. Harned apparently told IRS agents, “I’d like a piece of you, I’d kick your butt” and “I’m a very good shot.” All three convicted in West Virginia were clients of Las Vegas attorney Robert A. Jones. Mr. Jones told the Pittsburgh Post-Gazette that he’d win both of these cases. Apparently he needs to buy a new crystal ball.

It’s a shame that these medical practitioners haven’t spent some money in finding a cure for the flu. If they had been successful, they wouldn’t have any money problems.

Robert “Tractor” Traylor, a former NBA player for Milwaukee, Cleveland, Charlotte, and New Orleans, pleaded guilty on Friday to a charge of preparing a false tax return. Mr. Traylor, 29, attempted to conceal assets of his cousin, Quasand Lewis, according to this AP story. Mr. Lewis, Traylor’s cousin, was recently convicted of drug trafficking and money laundering–he distributed 22,000 pounds of marijuana in the Detroit metropolitan area.

Here’s a wonderful quote from the story: “Robert Traylor is a basketball player, not a businessman,” Traylor’s attorney, Steven Fishman, told The Associated Press on Thursday night. “He got some bad advice and unfortunately he took it. So here we are.”

Unfortunately for Mr. Traylor, the IRS doesn’t appreciate lying on a tax return. Mr. Traylor could be sentenced to as much as fourteen months at ClubFed.