Ocean County, N.J., Attorney Sentenced To Six Months In Prison, Six Months Of Home Confinement, For Income Tax Evasion And Failing To Pay Payroll Taxes

TRENTON, N.J. - An Ocean County, N.J., attorney was sentenced today to six months in prison and six months of home confinement for evading federal income taxes after hiding assets in an attorney trust account in his wife’s name when he was already in debt to the IRS, U.S. Attorney Paul J. Fishman announced. 

Lee Gottesman, 58, of Toms River, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson an indictment charging him with one count of federal income tax evasion and one count of failing to pay payroll taxes for the employees of his law firm. Judge Wolfson imposed the sentence today in Trenton federal court.

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

Gottesman operated a law firm in Toms River. In  2002, the IRS filed a levy on Gottesman’s assets because of unpaid taxes. Gottesman then opened a sub-account, within his attorney trust account, in the name of his wife. His wife had never been a legal client of his.

Gottesman ran nearly all of his personal and business expenses through the account, closing all other business and personal accounts in his name. His payments from the account included more than $90,000 in mortgage payments for his home; more than $17,000 in household expenses, including maintenance on his pool, landscaping services and construction costs; and thousands of dollars in other personal expenses, such as life insurance premiums, auto body repair work and personal credit card payments. The scheme allowed Gottesman to avoid paying personal income taxes on the hidden income. 

Gottesman also withheld payroll and other taxes from his employees’ pay, but never filed the required forms or turned the withheld payments over to the IRS. Gottesman specifically admitted he did not pay all his personal income taxes owed for 2006 or payroll taxes for 2009.

In addition to the prison term, Judge Wolfson sentenced Gottesman to three years of supervised release. He will also be responsible for paying all taxes owed from 2006 to the present, $27,384.99.

U.S. Attorney Fishman credited special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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Defense counsel: Salvatore Alfano Esq., Bloomfield, N.J.