June 17, 2013 — Financial crimes are pursued aggressively by the government’s Financial Fraud Enforcement Task Force, which involves at least 20 federal agencies and 94 U.S. attorneys’ offices along with state and local partners. As a result of the Task Force’s efforts, in just the last few years, the Justice Department has initiated close to 10,000 financial fraud cases against thousands of defendants involved in a variety of schemes against investors, home owners and the U.S. government.
One tool for fighting financial corruption is the IRS Whistleblower Office established by the Tax Relief and Health Care Act of 2006. The office was created to allow whistleblowers with unique information about tax fraud to notify the IRS and receive a financial reward for their efforts. The Act allows informants to keep a percentage of 15 to 30 percent of the amount recovered by the IRS as a result of their tip. For a tipster to receive compensation concerning a private individual’s IRS violations, the individual’s gross income must be in excess of $200,000 for each taxable year involved and the government must collect at least $2 million. There is no corresponding minimum recovery concerning tips about a corporation’s wrongdoing, however.
Former Construction Company Owner Failed to Disclose Sizable U.S. Bank Account
Leon Benzer, the former owner of a construction company in Las Vegas, has been indicted by a federal grand jury for tax evasion. The charges were brought as a result of the government’s Financial Fraud Enforcement Task Force.
This is not Benzer’s first brush with the law. Benzer had already been indicted on charges that between August 2003 and February 2009, the contractor devised a scheme in which he would send legal work involving construction defect litigation to a Nevada law firm and in return, the law firm ensured that Benzer’s former company, Silver Lining Construction, received a $7 million contract for condominium repairs with the Vistana Homeowner’s Association (Vistana HOA) in Las Vegas.
In the more recent indictment, the Justice Department alleges that Benzer failed to pay any taxes in connection with the five years’ of personal and business tax returns he filed in August 2006. The personal tax liability amounted to $459,000. The business employment tax liability was $687,000. And the unemployment tax liability was $18,000. When Benzer responded by attempting to negotiate the amount he would pay to satisfy his tax liability, the IRS asked for further detailed financial information.
At this point, the IRS learned that Benzer arranged to have $1 million of the $7 million contract with Vistana HOA wired to a personal bank account in the United States that Benzer opened in August 2007. Benzer neglected, however, to disclose the personal bank account to the IRS.
Employees Collaborate With IRS About Employers’ Tax Fraud
Employers who neglect to pay employment taxes should expect that eventually, someone will question the practice and notify the IRS. Before contacting the government, though, conscientious informants should understand how the process works. The financial fraud lawyers with Waters & Kraus offer government collaborators the legal representation they deserve. Contact us by email or phone our whistleblower attorneys at 855.784.0268 to discuss how we can protect your rights.