by Brian Mahany
The former owner of Buddy’s Carpet, Leif Rozin, and the company’s in house lawyer, Alan Koehler, were sentenced to prison for their roles in a tax fraud scheme. A jury found both guilty after a three week trial of conspiracy to defraud the United States. Rozin was also convicted of tax evasion. The charges are felonies.
Rozin, age 68, was sentenced to a year in prison. Koehler received 18 months.
The jury found that Rozin and Koehler conspired to have Buddy’s Carpet spend $3.6 million for eight “Loss of Income” insurance policies. The policies were shams. The duo purchased the insurance then claimed substantial tax deductions by treating the premiums as deductible business expenses. In reality, the bulk of the premiums were simply refunded.
To further impede detection of their scheme, Rozin and Koehler created several offshore entities in Nevis, West Indies and the Bahamas to conceal their paper trail. Prosecutors alleged the duo purposely set up their corporations in jurisdictions with strict bank secrecy laws.
Participating in the scam was Caduceus Life Insurance Company located in St. Croix, U.S. Virgin Islands. Caduceus, which was not licensed to sell insurance anywhere in the United States, issued the phony “loss of income” policies.
Previously, the owners of Caduceus and their attorney were themselves prosecuted and convicted for tax fraud.
Buddy’s Carpet is a regional midwestern carpet retailer with more than 30 stores.
The case was prosecuted by the IRS and U.S. Department of Justice, Tax Division.
If you have purchased loss of income insurance policies, welfare benefit plans or other products considered abusive tax shelters by the IRS, contact a lawyer immediately. You may be able to avoid criminal prosecution if you act quickly.
Mahany & Ertl, LLC is a boutique tax firm offering a wide range of professional tax services including audit defense, collection representation, tax court litigation and criminal investigation and criminal tax defense. Contact Brian Mahany for more information at (414) 704-6731 (direct) or through the firm’s website, https://www.mahanyertl.com.
We also concentrate in asset recovery and fraud recovery and have recovered hundreds of thousands of dollars against promoters of bogus or deficient benefit plans and phony offshore insurance policies.
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