U.S. Department of Justice
Suite 2001
211 West Fort Street
Detroit, Michigan 48226-3277
For Immediate Release:
Contact: Gina Balaya (313) 226-9758
Stephen Moore - IRS (313) 234-2410
January 23, 2004
Prominent Oakland County dentist's wife pleads guilty
United States Attorney Jeffrey G. Collins and Special Agent in Charge Mark Kroczynski, Internal Revenue Service Criminal Investigation Division, announced that Barbara Kosinski, 46, of Novi, Michigan, pleaded guilty to Count One of a June 20, 2002, indictment. She admitted to United States District Court Judge Arthur J. Tarnow to conspiring to structure currency transactions for the purpose of preventing currency transaction reports from being filed with the Internal Revenue Service.
The indictment charged Mrs. Kosinski, along with her husband, Dr. Timothy Kosinski, of conspiring with Melvin Phillips, of Detroit, Michigan, to impede, impair, obstruct and defeat the lawful functions of the Internal Revenue Service and with multiple counts of structuring transactions to evade reporting requirements.
According to court records, her husband, Dr. Kosinski, a licensed dentist practicing in Bingham Farms, Michigan, was also the president of T.J. Construction, which was involved with various Thyssen, Inc. construction projects throughout the 1990's, including the construction of a steel processing plant in Detroit, Michigan and one in Richburg, South Carolina. Dr. Kosinski hired Mel Phillips and his company, Phillips Contracting, to work on the construction projects at Thyssen and to supervise various construction workers.
During 1995 through 1998, Thyssen, Inc. paid T.J. Construction over $41.8 million. During the time period and into 1999, Dr. Kosinski wrote T.J. Construction checks made payable to Mel Phillips or Phillips Contracting for over $16 million dollars. However, over $8 million of the checks were deposited into Dr. Kosinski's personal bank accounts. Mrs. Kosinski agreed to help her husband, Dr. Kosinski, withdraw millions of dollars of cash from a joint saving account at Standard Federal Bank, with the specific intent to prevent the filing of currency transaction reports with the Internal Revenue Service. Federal law requires financial institutions to file currency transaction reports with the IRS documenting each deposit and withdrawal of more than $10,000 in currency.
Mrs. Kosinski admitted to conspiring with her husband and withdrawing hundreds of cash transactions in amounts of $9,500 to avoid the filing of currency transaction reports. Court records show that she withdrew the currency on 299 non-consecutive business days that totaled over $2.8 million.
On June 16, 2003, Dr. Kosinski was convicted by a jury of a conspiracy to defraud the United States for the purposes of impeding and impairing the lawful functions of the Internal Revenue Service in its ascertainment and computation of federal income taxes and federal employment taxes. On October 14, 2003, Dr. Kosinski was sentenced to 30 months imprisonment, followed by two years supervised release and a $60,000 fine.
Mr. Phillips had previously pleaded guilty to a count of conspiracy and a count of tax evasion. He was sentenced to 21 months imprisonment, followed by two years supervise release.
Dr. Kosinski, his wife Barbara, and Mr. Phillips withdrew over $7.6 million in currency from bank accounts maintained by the Kosinskis or under their control, during this same time period. Dr. Kosinski and Mr. Phillips made cash payments to individuals associated with the construction projects, and concealed the existence of a cash payroll by failing to maintain records, and cashing hundreds of checks at banks and making hundreds of cash withdrawals in amounts below $10,000 for the purpose of preventing the banks from filing currency transaction reports with the IRS.
Mr. Kroczynski, special agent in charge of the IRS Criminal Investigation Division stated, "This was a significant case and the evidence, conviction and pleas show the existence of a carefully planned scheme involving numerous people to defraud the Internal Revenue Service, as alleged. One of the lawful functions of the Internal Revenue Service is to monitor and analyze large cash transactions conducted at financial institutions throughout the United States. Circumventing federal laws to avoid the documentation of these currency transactions can lead to serious consequences."
Conspiring to structure currency transactions for the purpose of preventing
currency transaction reports from being filed with the Internal Revenue
Service, is in violation of Title 18, United States Code, Section 371.
A conviction carries a maximum penalty of five years imprisonment and a
$250,000 fine. Any sentence will be imposed under the United States Sentencing
Guidelines according to the nature of the offense and the criminal background,
if any, of the defendant. The sentencing date has not been determined.
Mr. Collins commended the special agents of the Internal Revenue Service Criminal Investigation for their work in this investigation. Trial Attorneys John E. Sullivan and Richard M. Rolwing, Department of Justice, Tax Division, Washington, D.C. prosecuted the case.