A 60 year old woman pleaded guilty last week to bank fraud and tax evasion in a Jackson, Mississippi federal court. Prosecutors say that Barbara Cummings forged checks from her place of employment for several years before getting caught. She was employed as an office manager.
According to court records and documents from the U.S. Attorney’s Office, Cummings forged the signatures of her employers and made the forged checks payable to herself and her husband. When interviewed by FBI and IRS special agents, Cummings admitted to embezzling the funds and defrauding the banks.
The tax evasion charge stems from the her 2008 income tax return. Despite stealing $100,000 that year, her return only showed her legitimate income. In other words, she failed to report and pay tax on the money she had taken. (The indictment suggests that her total was haul was $197,000.)
As part of a plea agreement, identity theft charges were dropped.
Income from criminal activities is taxable. Like Al Capone, Cummings learned that lesson the hard way. Whether you are a drug dealer, embezzler or money launderer, if you have illegal source income, that income is just as taxable as normal wages or commissions.
Sentencing has been scheduled for mid January. She faces 35 years in prison as well as being required to repay the money.
Federal sentences are determined in large part by the federal sentencing guidelines. Those guidelines factor prior criminal history, cooperation, acceptance of responsibility, and the amount of money taken or taxes not paid. The more you steal, the longer your probable sentence. With a clean record and cooperation, Cummings is likely to get a much shorter sentence. Going to prison at age 60, however, is never much fun.
Tax evasion is a serious felony. Hundreds of people go to prison every year after being convicted of tax crimes. Having a great criminal tax attorney to assist you is critical. Even if you have already confessed your involvement, the nature of the plea deal and the sentencing arguments can mean the difference between probation or a lengthy prison stay.
For example, pleading to a tax evasion charge carries a 5 year sentence while bank fraud can result in a 30 year sentence. Sometimes a lawyer can convince prosecutors to accept a plea for failure to report income, a misdemeanor punishable by just 12 months. Similarly, an experienced tax lawyer can often get the guideline calculations reduced. While judges aren’t bound by the guidelines, they do carry a great deal of weight.
About the author. Brian Mahany is a former Assistant Attorney General – Tax for the State of Maine. For almost a decade he has been in private practice defending the liberty of those accused of state and federal tax crimes. His firm, Mahany & Ertl, is a full service tax and white collar criminal defense firm. For more information, contact Brian at or by telephone at (414) 704-6731 (direct). All inquiries protected by the attorney – client privilege.
Post by Brian Mahany, Esq.