Wednesday, August 29, 2012

Attorney is Sentenced for Failure to File (8/29/12)

The following is a news release I received in the email today.  I have bold-faced items that may be of particular interest to readers of this blog.  Although not clear from the press release, the trusts he created may have been offshore trusts.  See for a related blog entry involving the Genesis Fund, Atypical Foreign Bank Account Related Sentencing (4/5/12), here.


NEWS RELEASE
Internal Revenue Service - Criminal Investigation
Los Angeles Field Office
Leslie P. DeMarco, Special Agent in Charge

For Immediate Release:  August 27, 2012

Prepared by: Special Agent Felicia McCain, Public Information Officer
Office:  (619) 615-9071
Mobile: (619) 770-9317
Email: Felicia.McCain@ci.irs.gov

Orange County Attorney Sentenced to Six Months Custody for
Failing to File a Federal Income Tax Return

Los Angeles- Today, Kevin J. Mirecki, 53, was sentenced to six months federal custody, one year of supervised release, and ordered to pay restitution of $206,419 to the Internal Revenue Service (“IRS”).  Mirecki was also fined $20,000 by U.S. District Judge Dale S. Fischer for his failure to file Federal income tax returns.

On February 9, 2009, Kevin Mirecki pleaded guilty to three counts of failing to file Federal tax returns.  Mirecki failed to file an individual federal income tax return (Form 1040) and two corporate income tax returns (Forms 1120) for his companies Kevin J. Mirecki, Inc. and American & International Corporate Services (AICS).  According to the plea agreement, Mirecki admitted he failed to report over $1.3 Million in personal income for years 2000 through 2003.  Mirecki also admitted in the plea agreement that he created Genesis Fund Ltd.  as a Nevis  corporation and created trusts for four individuals charged in the March 2005 indictment.  

On March 30, 2005, nine defendants were indicted in the investigation of the Genesis Fund in an 83-count Indictment charging violations of conspiracy, wire fraud, mail fraud, tax fraud, money laundering, obstruction and forfeiture statutes. Eight defendants pleaded guilty and one defendant was convicted of tax evasion after a jury trial in September, 2011.  Sentences for these defendants ranged from 12 months probation to 62 months imprisonment.

According to court documents, the criminal investigation was initiated because of Mirecki’s persistent pattern of failing to file tax returns and pay income taxes even after IRS intervention. During this investigation it was learned that Mirecki had performed trust-related work for individuals involved with the Genesis Fund.  Genesis Fund was marketed as an investment in foreign currency trading.  

Mirecki received a lighter sentence today than many defendants in related cases due to his substantial assistance and testimony in the investigation and prosecution of criminally culpable individuals related to the Genesis Fund.  Mirecki testified at a Federal criminal trial in another judicial district and testified for the government.  

 “Kevin J. Mirecki’s cooperation was valuable to federal law enforcement and assisted in the successful prosecution of multiple defendants and orders of restitution to investors and the IRS.  Notwithstanding this cooperation, those who intentionally fail to file their tax returns and fail to pay taxes must know that there is a price to be paid, including time in prison. Today’s sentence reflects the nature and severity of the tax crimes committed by Mirecki, while at the same time reflecting the scope of his cooperation with the government.  Mirecki’s sentence is meant to restore integrity and faith in the nation’s tax system”- Leslie P. DeMarco, Special Agent in Charge of IRS Criminal Investigation Los Angeles Field Office.

The investigation of Kevin J. Mirecki was conducted by IRS – Criminal Investigation in the Los Angeles Field Office and prosecuted by the Department of Justice Tax Division, Western Criminal Enforcement Section.

###

3 comments:

  1. Jack, I don't know much at all about criminal tax prosecutions, but the implication of the last sentence of the Press Release struck me as curious: "Mirecki's sentence is meant to restore integrity and faith in the nation's tax system." Perhaps it's just me, but the implication of that remark is at confusing: Is the USGOV acknowledging a deep lack of faith in the system! Even in its darker days, the SEC did not admit that the system had devolved to that desperate point, because you might just encourage others to game the system. As I said, it may be just me. PATRICK CARMODY

    ReplyDelete
  2. The tax criminal enforcement system has as its goal to undergird the tax system and, in that sense, to bolster the integrity and faith in the tax system. It is strange that there is the implication that the integrity and faith has been lost and therefore needs to be restored. In some respects, the integrity of and faith in the system has declined over the years. How many recent politicians have been willing to say something like I don't mind paying taxes because that is the cost of civilized society. That was original a quote from Holmes but other politicians subscribed to the notion (FDR for example). That is not the mantra of the Republican party, and I don't believe it is really embraced by the Democratic party. But if we are to be a civilized society -- the unum out of e pluribus unum -- then that should be one of our foundational beliefs. And the integrity and faith in the tax system is required for that.

    I think most of the anti-tax people really are railing against the expenditure side (perhaps even the expenditure side built into the tax system). But it is expenditures that they really complain about and not the tax which is just a system to raise the money to fund the expenditures Congress has approved.

    But, so long as we as a country -- or large segments of it -- demonize taxes, then there will be a major integrity and faith issue.

    Just my view.

    Thanks,

    Jack

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