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Press Release

Two Attorneys Plead Guilty on Eve of Tax Fraud Trial

For Immediate Release
U.S. Attorney's Office, Eastern District of Pennsylvania

PHILADELPHIA – United States Attorney William M. McSwain announced today that attorneys Edward Millstein and Susan Halpern, both of Philadelphia, pled guilty to tax offenses. Millstein and Halpern, who are married, were scheduled to begin trial on Monday, November 5, 2018, before U.S. District Court Judge Cynthia M. Rufe. 

Millstein pled guilty to tax evasion, in violation of 26 U.S.C. § 7201. Millstein and Halpern owed $444,225 in taxes for the calendar years 2007 through 2011. While the Internal Revenue Service (IRS) was attempting to collect that debt, Millstein hid money in his minor children’s bank accounts to avoid IRS levies. Millstein also lied about obtaining a loan to pay the debt, and he failed to disclose a bank account that he used to deposit the $300,000 annual salary he earned from a local law firm from 2013 through 2015.

Halpern pled guilty to two counts of failure to pay taxes, in violation of 26 U.S.C. § 7203.  Millstein and Halpern filed their taxes as a married couple filing jointly. They reported an Adjusted Gross Income of $344,350 in 2010 and $394,030 in 2011. The couple paid no money towards their 2010 or 2011 tax debt. By the time the couple was indicted on April 11, 2017, they owed $143,473.35 in taxes for 2010 and $153,560.69 in taxes for 2011. At trial, the government was prepared to present testimony that Halpern had spent tens of thousands of dollars on clothing, cosmetics, jewelry, salons, private clubs, and trips abroad, but not a penny on the 2010 or 2011 tax debt.

“These defendants intentionally failed to pay taxes, instead choosing to hide their money and spend it on luxuries that they could not afford,” said U.S. Attorney McSwain. “The defendants are both attorneys—they know better.  Instead of being law-abiding citizens, they chose to deliberately cheat the system and bankroll their lavish lifestyle. This Office will continue to hold tax cheats accountable for their crimes.”

“The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS' enforcement strategy,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. "Rest assured that we will continue to protect the integrity of the tax system by ensuring that everyone pays their fair share of taxes."

Millstein faces a maximum sentence of 5 years in prison, 3 years of supervised release, a $100,000 fine, and a $100 special assessment.

Halpern faces a maximum sentence of 2 years in prison, 1 year of supervised release, a $100,000 fine, and $100 special assessment.   

Millstein and Halpern will be sentenced on February 25, 2019.

The case was investigated by the Internal Revenue Service, Criminal Investigation Unit. The case is being prosecuted by Assistant United States Attorney Jason P. Bologna.

Updated November 7, 2018