New York Attorney Stanley L. Cohen Pleads Guilty to Federal Tax Charge
SYRACUSE, NEW YORK - Stanley L. Cohen, an attorney with offices on Avenue D, New York City and Jeffersonville, New York, entered a guilty plea in United States District Court in Syracuse this morning to a felony offense of corruptly obstructing and impeding the Internal Revenue Service, according to United States Attorney Richard S. Hartunian and Acting IRS Criminal Investigations Special Agent-in-Charge Shantelle P. Kitchen.. Sentencing is scheduled in U.S. District Court on August 21, 2014 at 10:00 am before the Hon. Norman A. Mordue.
Under terms of a plea agreement, Cohen is to be sentenced to 18 months incarceration. He is also required within the next ten days to enter guilty pleas in the Southern District of New York to pending charges of failure to file income tax returns. As part of his agreement, Cohen is also required to pay all federal and state income taxes due and owing from the years 2005 through 2010. He has also waived any appeal and collateral attack of his conviction.
This case followed a lengthy investigation led by the Internal Revenue Service-Criminal Investigations, Syracuse Office. Investigators found that the defendant failed to file both federal and state tax returns for the years 2005-2010. In those years, he only filed a single extension to file his return and made only a modest payment towards taxes due and owing. He subsequently never filed state or federal tax returns for these six years.
In court, the government stated that its evidence revealed that in the tax year 2004, the last year Cohen filed an income tax return, he had claimed gross receipts of $289,000 when in fact investigators ascertained that he had deposits in excess of $426,000 for that year. Investigators determined that for the years 2004 through 2010, Cohen had deposits totaling $3,673,906.85 in his financial accounts.
In the course of the investigation, judicially authorized search warrants were executed at Cohen’s law office on Avenue D in New York City and his law office in his home in Jeffersonville, New York. Investigators found that essentially he kept no financial records regarding income or payment of fees from clients. From 2005 to 2010, he also failed to file either a 1099 or W2 for payments made to a law office assistant, who performed services for him during those years.
A search warrant executed on a safe deposit box that Cohen maintained in a bank in Jeffersonville, New York revealed that he had $50,000 in cash. Bank records revealed that Cohen accessed his safety deposit box 77 times from 2006 through 2008 and made deposits of cash totaling approximately $504,000 at that bank. Additional investigation revealed that approximately $183,500 of this amount was deposited by Cohen on days when he accessed his safety deposit box. On many occasions, Cohen made multi-thousand dollar cash deposits at the Jeffersonville bank and frequently exchanged small bills for $100 bills.
Additional evidence developed during the investigation revealed that Cohen made deposits of cash to his financial accounts as follows:
In 2004 he made in excess of $194,000 in cash deposits, in 2005 more than $237,000, in 2006 more than $321,000, in 2007 more than $395,000, in 2008 more than $405,000, in 2009, after the execution of the referenced search warrants, he deposited more than $54,000 and in 2010 more than $147,000 in cash. Many of these deposits were made in amounts under $10,000, thus avoiding the filing of currency transaction reports required under the law.
Investigators also found that Cohen would cause wire transfers of cash to his accounts to be made by clients, many of whom were residents of the Akwesasne Reservation. These wire transfers all made by MoneyGram from the Speedway Convenience Store located near the Reservation. The wire transfers totaled more than $643,000 between October 2004 and December of 2008.
United States Attorney Richard S. Hartunian stated, “As citizens, we all have an obligation to pay our fair share of taxes needed to support the United States. Stanley Cohen sought to avoid his tax obligations by consistently failing to file his federal and state tax returns over a six year period and by operating his law practice in a manner that corruptly hid millions of dollars in legal fees from the Internal Revenue Service. No citizen, especially an attorney, is above the law. The Internal Revenue Service has done a commendable job in helping to bring Mr. Cohen to justice.”
Acting Special Agent in Charge Shantelle P. Kitchen said, “The investigation and prosecution of individuals who brazenly attempt to obstruct the Internal Revenue Service and to prevent it from performing its mission is vital to maintaining public confidence in our tax system. In addition to serving as a warning to those who might contemplate similar activity, this outcome provides the honest American taxpayer with a timely reassurance that their government is committed to making sure that everyone pays their fair share.”
The case was investigated by the Internal Revenue Service-Criminal Investigations, Syracuse Office, the New York State Police and the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorneys Stephen Green and John Duncan.
For further information please contact Assistant U.S. Attorney John Duncan at 315-448-0672.