305 371-8101

Doctor and Lawyer Were Convicted of Tax Fraud Relating to Employee Leasing Scheme

USA v. BRODNIK,  710 F. Supp. 2d 526,  (S.D. WV 2010)

Defendants, a doctor and an attorney, were charged with violating U.S. tax laws and conspiring to commit tax fraud based on an employee leasing scheme.   Defendants moved to dismiss the indictments, the doctor moved for discovery and to strike certain expert testimony, and the government moved to disqualify the doctor's counsel.

The indictments were based on a scheme whereby the doctor was treated as a leased employee of an Irish entity for tax purposes. In adopting the magistrate's recommendation, the court declined to consider most of defendants' objections because they were not specific and particularized.

The court rejected the doctor's contention that the magistrate ignored the definition of non-qualified deferred plans and erred in ruling on his claim that the law in this area was ambiguous, finding that this argument missed the point because the indictments did not allege that the deferred compensation plan was illegal, but rather that the deferred compensation plan was used for the illegal purpose of evading income taxes.