Summary: A personal injury and medical malpractice lawyer in New York owes the IRS over $3.3 million for not paying his taxes for almost twenty years.
A Manhattan personal injury and medical malpractice attorney charged with tax evasion surrendered today in a Manhattan federal court. Herbert Lindenbaum is charged in a six-count indictment of evading taxes in a scheme that has lasted nearly twenty years.
Preet Bharara, the United States Attorney for the Southern District of New York said, “As an attorney, Herbert Lindenbaum should have known better. But as alleged, rather than abide by the law, Lindenbaum engaged in a nearly two-decade scheme to divert and evade millions of dollar in taxes.”
Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation, Kathy Enstrom, added, “As alleged in the indictment, Mr. Lindenbaum intentionally evaded his tax obligations for well over a decade, failing to pay millions he owed in taxes. Fulfilling individual tax obligations is a legal requirement and those who willfully evade that responsibility will be prosecuted.”
They claim that Lindenbuam has failed to pay over $3.3 million in back taxes, fees, penalties, and interest to the IRS. His scheme started back in 1999 when he was a personal injury and medical malpractice lawyer in New York, New York. For 1999 to 2013, he owed the IRS over $2.5 million. He only paid $85,000 so with penalties, interest, and fees, he now owes over $3.3 million to the IRS.
Lindenbaum had five different tactics that he would use to hide his money. The first method he used was depositing business checks for his legal work into his wife’s personal bank accounts. Another method he used was by paying his wife and son roughly $150,000 for work for his law firm that they never performed.
One of the bigger methods Lindebaum used was using his law firm accounts as personal accounts to pay personal expenses. This included $85,000 in alimony, $425,000 in apartment rental and utility payments, $75,000 on personal loan repayments, $50,000 for the tuition and other expenses of his kids, $25,000 in luxury car payments and parking expenses, and $10,000 in medical expenses. Some of the accounts he used were Interest on Lawyer accounts (IOLA). New York requires IOLA accounts hold only client funds but Lindenbaum still used at least two of them.
The last two methods he used were cashing checks worth over $325,000 total to himself from his business accounts and opening two personal bank accounts to deposit over $160,000 of business receipts after the IRS levied two of his business bank accounts.
Lindenbaum is charged with one count of obstructing the IRS, one count of tax evasion, and four counts of failure to pay the IRS.
How many years in prison do you think Lindebaum should he serve? Tell us in the comments below.
To learn more about others charged with tax evasion, read these articles:
- 17 Year Sentence Given to Former ICE Attorney for Taking Bribes
- Paul Daugerdas Sentenced in Largest Tax Fraud Case in History
- North Hempstead Attorney Arrested for Tax Evasion
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