Disbarred New Jersey Attorney Sentenced To Three Years In Prison For Failing To Report Tax Preparation Income

Evasion Resulted in Tax Loss of More Than $1 Million

CAMDEN, N.J. – A tax preparer and disbarred New Jersey lawyer was sentenced today to 36 months in prison for submitting false tax returns or failing to file returns for five years, resulting in a tax loss to the government of more than $1.1 million, U.S. Attorney Paul J. Fishman announced.

Joseph Gallagher, 69, of Rutherford, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an Information charging him with one count of tax evasion. Judge Hillman imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

For at least five years, Gallagher used a consulting company – established at Gallagher’s direction and purportedly operated by another person – to evade income taxes by having his income from working as a tax preparer deposited into the company’s bank account. Gallagher filed income tax returns with the IRS, failing to report $590,513, $600,157 and $682,373 for the calendar years 2004, 2005 and 2006, respectively. Gallagher failed to file any income tax return at all for calendar years 2007 and 2008, failing to report $715,694 and $770,445 for those years. In total, Gallagher admitted failing to report $3,359,182 in taxable income to the IRS, resulting in a tax loss to the government of $1,198,196.

In addition to the prison term, Judge Hillman sentenced Gallagher to two years of supervised release and ordered him to pay a $60,000 fine. He is also required to pay his more than $1 million in outstanding taxes to the IRS, plus interest and penalties.

U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation that resulted in today’s sentence.

The government is represented by Jacob T. Elberg, Deputy Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

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Defense counsel: Brian Neary Esq., Hackensack, N.J.