Toms River Attorney Arrested On Income and Payroll Tax Charges
IRS-Criminal Investigation agents arrested an Ocean County, N.J.,attorney at his residence last week for allegedly evading federal income taxes and failing to pay payroll taxes for the employees of his law firm from tax years 2006 through 2009, U.S. Attorney Paul J. Fishman announced.
A federal grand jury returned an Indictment yesterday charging Lee Gottesman, 56, of Toms River, N.J., with four counts of personal income tax evasion and 15 counts of willful failure to pay payroll taxes. He is expected to make his initial appearance before U.S. Magistrate Judge Patty Shwartz this afternoon in Newark federal court.
According to the Indictment unsealed Friday:
Gottesman employed two other attorneys and a legal secretary at his firm. In 2002, the IRS filed a levy on Gottesman’s assets because of unpaid taxes. Gottesman allegedly opened a sub-account within his attorney trust account, in the name of his wife, even though Gottesman’s wife had never been a legal client of his. Gottesman then began to run substantially all of his personal and business expenses through the sub account, and closed all other business and personal accounts held in his name. Gottesman’s payments from the sub account allegedly included more than $90,000 in mortgage payments for his home; more than $17,000 in
household expenses, including maintenance on his pool, landscaping services, and construction costs; and thousands of dollars in other personal expenses, such as life insurance premiums, auto body repair work, and personal credit card payments.
During the tax years covered by the Indictment, Gottesman allegedly earned more than $440,000 in taxable income, and incurred more than $110,000 in income tax liability. He allegedly did not pay any personal income tax for this period, nor did he file any personal tax returns.
Also during that period, Gottesman employed attorneys and secretaries, withheld payroll and other taxes from the employees’ pay, but never turned these withheld payments over to the IRS, nor did he file the required forms with the IRS.
The four tax evasion counts with which Gottesman is charged are each punishable by a maximum penalty of five years in prison and a $250,000 fine. Each of the 14 payroll tax counts is punishable by a maximum potential penalty of five years in prison and a $10,000 fine.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge John R. Tafur, with the investigation leading to the Indictment and arrest.
The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Computer and Intellectual Property section of the Economic Crimes Unit in Newark.
The charges and allegations contained in the Indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.