Wednesday, August 12, 2009

Former Rabbi Charged in $35M Tax Fraud Scheme

From Web CPA:

A former Chicago rabbi and nine others were charged in a $35 million tax fraud conspiracy, accused of filing 3,300 false tax returns in the names of federal prison inmates.

Marvin Berkowitz, 62, who had moved to Israel in 2003 to avoid earlier tax fraud charges, was arrested in Jerusalem, while two of his sons and a son-in-law were detained in Chicago and Los Angeles. They and six other defendants were charged in the scheme to file the phony refund claims, causing the IRS to issue refunds totaling more than $1.5 million, while various states issued tax refunds totaling more than $2.5 million. Berkowitz directed the fraud ring from Jerusalem and allegedly caused at least $800,000 in tax refunds to be paid to, or for the benefit of, at least eight members of his family, according to prosecutors.

The 10 defendants were charged by a Chicago grand jury in a 41-count indictment that was returned in February and unsealed Monday. The indictment remained sealed since February to coordinate the investigation and arrests with Israel.

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