Criminal Tax Investigations
& Prosecutions

Kostelanetz LLP has long maintained a national and international reputation as one of the country’s preeminent law firms engaged in defending against criminal tax investigations and tax fraud prosecutions. Chambers USA notes that Kostelanetz has a “reputation as an expert tax boutique with significant strength in criminal proceedings,” and one interviewee told Chambers that Kostelanetz is “one of the top tax boutiques in the country.”

That reputation comes from our more than 75-year history of focusing on civil and criminal tax controversies and white-collar criminal defense. Our attorneys possess a unique level of experience, knowledge, training and skill in white-collar and tax controversy matters. Our firm has more experience in criminal tax cases than most large firm white-collar and tax controversy departments. There are very few issues or fact patterns that our attorneys have not already encountered in previous cases involving alleged tax evasion, tax fraud, and other tax-related criminal allegations.

The Kostelanetz team has significant government experience and includes a former Acting Assistant Attorney General of the U.S. Department of Justice (DOJ) Tax Division, a former Chief of the IRS Criminal Investigation Division, several attorneys with experience in the IRS Office of Chief Counsel, four attorneys with criminal and civil DOJ Tax Division experience, a former Special Trial Attorney for the IRS Office of Chief Counsel in New York, and three former Assistant United States Attorneys in the Southern District of New York. As a result, Kostelanetz attorneys are fully familiar with the practices of the IRS, the DOJ, and other taxing authorities.

Our firm’s extensive tax experience serves it well in representing clients faced with criminal tax investigations conducted by the IRS, the DOJ Tax Division, local United States Attorneys’ Offices, or state prosecutors, as well as cross-border investigations involving both U.S. and foreign law enforcement agencies. Our attorneys have represented thousands of corporations and individuals nationwide and outside the United States in cases, including allegations of failure to report income, overstated deductions, failure to collect and pay employment taxes, preparation of false returns, failure to file returns, presentation of false documents to the IRS, conspiracy to impede or obstruct the IRS, as well as other tax evasion-related crimes, such as structuring and currency transaction reporting violations.

The firm, overall, is ranked nationwide by legal rankings agency Chambers USA in Tax Controversy, and four of the firm’s attorneys are ranked by Chambers USA for Tax: Fraud nationally. Interviewees remarked to Chambers USA about Kostelanetz:

“There’s no better group of people to handle tax controversy matters – they’re very effective and personable.”
“They’re tax experts and they have a deep knowledge and thorough understanding of the tax code, but also how the IRS and DOJ are going to approach things.”

The firm also has been recognized as a Tier 1 National “Best Law Firm” in three categories, Tax Law, Litigation – Tax, and Criminal Defense – White-Collar, by U.S. News – Best Lawyers®.

Assisted thousands of individual and corporate taxpayers in voluntarily disclosing their prior domestic and international tax and reporting non-compliance to the IRS and the U.S. Department of Justice.

Successfully obtained deferred prosecution agreements for three Swiss banks that were investigated for assisting and conspiring with United States taxpayers to hide their foreign bank accounts and evade their U.S. tax and reporting obligations.

Convinced DOJ prosecutors and IRS criminal investigators to drop criminal charges against a billionaire real estate developer who was investigated for his alleged relationship to foreign trusts and bank accounts.

Persuaded DOJ prosecutors and IRS criminal investigators to cease their criminal investigation of a prominent entrepreneur in the entertainment industry who was investigated for alleged failure to properly report payments among a global network of companies.

Convinced New York State prosecutors to drop tax fraud charges against a well-known investor and businessman who was investigated for alleged failure to pay millions of dollars in sales tax on purchases of art and jewelry.

Persuaded DOJ prosecutors to forego an investigation of a billionaire businessman and real estate investor for alleged failure to report an $80 million foreign bank account.

Secured several favorable non-jail sentences for clients facing federal criminal charges related to undeclared foreign bank accounts.

Convinced the New York County District Attorney’s Office to abandon a criminal investigation of a client for failure to file New York City income tax returns, and successfully resolved the case in a civil manner.

Successfully represented Denis Field, the former CEO of BDO Seidman, in a major tax shelter trial in the Southern District of New York. After Mr. Field had initially been convicted on all counts, K&F obtained his acquittal on all counts at re-trial in a case described by the government as the largest criminal tax fraud in history.

Obtained an acquittal on all 36 counts brought against an accountant who prepared tax returns on the theory that wages and salaries cannot be legally taxed. The case was a retrial of the same charges that had resulted in a hung jury, split six to six. Experts in the field, and the government itself, called the result “astonishing.”

Won the acquittal of a lawyer accused of committing tax fraud in a land purchase transaction by allegedly hiding his ownership in a nominee.

Obtained the dismissal of all charges against the former Vice Chairman of Tax at KPMG, LLP, in what was described as the largest tax shelter prosecution in United States history, on the ground that the government had wrongfully interfered with his (and other defendants’) right to advancement of legal fees by KPMG.

Convinced the Department of Justice not to prosecute an NBA referee for tax evasion. Our client, one of approximately a dozen NBA referees referred by the IRS for prosecution on identical grounds, was the only one not charged.

Obtained the acquittal of a businessman accused by six different witnesses of paying bribes which were allegedly mischaracterized as legitimate business expenses.

Convinced, on the eve of trial, the United States Attorney’s Office for the Southern District of New York to dismiss with prejudice its outstanding tax fraud indictment of a prominent Manhattan landlord.

Suppressed all statements made by our client to the government, on the ground that the government coerced the statements by pressuring the client’s former employer to cease paying the client’s legal fees if the client refused to be interviewed by the government.

Persuaded the IRS not to prosecute a garment manufacturer who had failed to file tax returns for six years, on the ground that he was distracted by turmoil in his business and personal life.

Persuaded federal prosecutors not to criminally charge the chief executive of an investment company with tax evasion.

Persuaded federal prosecutors not to charge a principal of one of the largest Chinese food distribution companies on the East Coast in an investigation into currency transaction reporting offenses.

Persuaded federal prosecutors not to charge an owner of a multi-state retail business with tax violations based on inventory valuation issues, despite allegations of unreported income from multiple witnesses.

Persuaded federal prosecutors not to charge a principal of one of the largest Chinese food distribution companies on the East Coast in an investigation into currency transaction reporting offenses.

Persuaded IRS special agents to discontinue an administrative criminal tax investigation despite several years of substantial unreported income and tax due.

Obtained a non-jail disposition for the owner of a concrete distribution company for structuring offenses.

Obtained a non-jail disposition for a prominent oncologist who admitted to filing false tax returns and owing more than $750,000 in additional federal income tax.

Obtained a more than 50% downward variance for an owner of a numerous food service businesses operating within government buildings in the Washington, D.C. metropolitan area, despite an admission of employment and sales tax loss exceeding $11,000,000.