New York Law Journal, Judge Hands Two-Year Sentence to Ex-Herrick Tax Head:
Four months after pleading guilty to tax charges, former Herrick Feinstein partner Harold Levine in New York was sentenced Wednesday to 24 months in federal prison for his role in a scheme to defraud the IRS.
U.S. District Judge Jed Rakoff of the Southern District of New York in Manhattan handed down the sentence against Levine, who was indicted a year ago this month on wire fraud and tax evasion charges.
U.S. Attorney’s Office for the Southern District of New York Press Release, Manhattan Tax Attorney Sentenced To Two Years In Prison For Participation In Multimillion-Dollar Tax Evasion Scheme And Lying To The IRS:
Acting U.S. Attorney Joon H. Kim said: “Harold Levine stole first from his law firm partners and then from American taxpayers by filing tax returns that left out millions of dollars of income. As if tax evasion by a tax attorney were not bad enough, Levine tried to get out of it by lying to the IRS during an audit and urging a witness to give false testimony. Levine’s jail sentence should serve as a reminder that everyone – including tax lawyers – must be truthful in reporting their income, and deal honestly with, the tax authorities.”
According to the Indictment, LEVINE’s guilty plea, and statements made during the plea proceedings and other court proceedings:
Between 2004 and 2012, LEVINE, a tax attorney and former head of the tax department at a major Manhattan Law Firm (the “Law Firm”), schemed with co-defendant Ronald Katz, a certified public accountant, to obstruct and impede the due administration of the Internal Revenue laws by evading income taxes on millions of dollars of fee income generated from tax shelter and related transactions that LEVINE worked on while a partner of the Law Firm. Specifically, LEVINE failed to report approximately $3 million in income to the IRS on his personal tax returns during the period 2005-2011. Most of the fee income LEVINE failed to report was routed by him through a limited liability company LEVINE controlled, which was nominally owned by a family member.
As part of the scheme, for example, LEVINE caused tax shelter fees paid by a Law Firm client to be routed from the Law Firm’s escrow account to a partnership entity he co-owned with Katz and thereafter used those fees – totaling approximately $500,000 – to purchase a home in Levittown, on Long Island. LEVINE caused the home to be purchased as a residence for a Law Firm employee (the “Law Firm Employee”) with whom he then enjoyed a close personal relationship. Although LEVINE allowed the Law Firm Employee to reside in the Levittown house for over five years without paying rent, LEVINE and Katz prepared tax returns for the entity through which the home was purchased that claimed false deductions as a rental property.
In February 2013, LEVINE was questioned by IRS agents concerning his involvement in certain tax shelter transactions and the fees received by LEVINE from those transactions. During that questioning, LEVINE falsely told the IRS that the Law Firm Employee paid him $1,000 per month in rent while living in the Levittown home. In addition, when the Law Firm Employee was contacted by the IRS and summoned to appear for testimony, LEVINE urged the employee to falsely tell the IRS that she had paid $1,000 per month in rent to LEVINE.