Accounting Malpractice and Tax Fraud Scheme Leads to Prison
A 54 year old accountant from Chagrin Falls, Ohio is headed to prison after being convicted of fraud and obstructing the IRS. Andrew Zelenkofske was sentenced to 36 months in prison. He must also serve an additional 3 years on supervised release once out of prison and pay almost $1 million in restitution.
Prosecutors say that between 2009 and May of 2012, he defrauded four of his clients of over $1 million. The money was to prop up a failing restaurant he owned. In one instance he conned an elderly client into believing that she owed the IRS $188,550. She didn’t owe this amount but paid him the money believing she owed the money and that he was going to give it to the IRS on her behalf.
In another instance, Zelenkofske forged an IRS levy release, not for his own benefit but to assist a client. It is unclear if he received any of the proceeds of the released funds.
Prior to being charged, Zelenkofske was a member of three different committees of the Pennsylvania Institute of CPAs. He also had a law degree and an advanced masters of law degree in taxation.
As far as accounting malpractice cases go, this one is quite bizarre. Most cases involve accountants missing filing deadlines or giving bad advice. Zelenkofske, however, was charged with stealing from his clients.
Although ordered to pay restitution, it is doubtful if any of his clients will be repaid. The restaurant owned by Zelenkofske was already failing and his future as an accountant or lawyer is all but extinguished. Traditional accounting malpractice insurance policies typically don’t cover theft or intentional misconduct.
Cases like this are tragic. Especially when victims are elderly. Zelenkofske once may have been a well respected accountant but in less than two months he must begin serving his sentence. (He is a widower with several children; the court allowed him time over the holidays to get his personal affairs in order before reporting to prison.)
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Victim of accounting malpractice? We may be able to help you get back your hard earned money. For more information contact attorney Brian Mahany at or by telephone at (414) 704-6731. All inquiries kept in complete confidence.