The Contrary Son

 

Our Passover Seder was just me and my wife.  For some very personal and positive reasons, it was even more uplifting than either of us had anticipated.  We missed having company, but then again, having some time alone with one's spouse also has its rewards.

 

The Hagaddah is the book that contains the order of the Pesach Seder (the word "seder" is Hebrew for order).  The Seder begins with discussion of The Four Sons:  The Wise Son is to be instructed in all of the details of the seder.  The Contrary Son (in Hebrew, "rasha" (evil)), who excludes himself from the practices and principles of the Torah is to be told that the Seder is for what G-d did for us (and not him) when He brought us out of Egypt; had the Contrary Son been in Egypt he would not have been redeemed.  The Simple Son, who asks "What is this," is given a simple answer to the effect that it is gratitude to G-d who brought us out of Egypt.  And the Son who Cannot Even Ask a Question must be told the story of the redemption from Egypt.  The remainder of the Seder essentially consists of telling that story for his benefit (and our own).

 

One Contrary Son is former attorney Stanley L. Cohen, who, the day before Pesach (Monday, 14 April 2014), pled guilty to various federal tax crimes, and, upon such plea, ceased to be an attorney in New York.  This Stanley Cohen (I have known throughout my life a handful of other individuals also named Stanley Cohen, and feel bad for them on account of this besmirchment of their good names) is the disciple of another Contrary Son, William Kunstler, and a former law partner of terrorist lawyer Lynne Stewart.  If the name Stanley L. Cohen sounds familiar, it is because he has just come off of defending Bin Laden's son-in-law, Suleiman Abu Ghaith.

 

Understand that the criminal defense attorney is an indispensable component of the justice system because in criminal prosecutions, it is absolutely essential that the government prosecutors be held to the requisites of the United States Constitution, no matter how heinous the criminal, and no matter how obvious his or her guilt.  Anything else would be an unchecked government, the effects of which we see today, before our very eyes, as the Obama administration views itself as being above the law.

 

Nor is there anything inherently wrong with a Jewish lawyer serving as a defense attorney for an enemy of the Jewish people (of which we have plenty); the criminal defendant may be the nominal client, but the truly diligent defense attorney is really defending the U.S. Constitution.

 

Cohen was not defending the U.S. Constitution; his objective has long been to enable the enemies of America and of the Jewish people.  He is a self-hating Jew.  He is truly the Contrary Son.

 

This post shall not link to Cohen's website, where he whines about how the U.S. Government has been on a witch hunt in his prosecution.  Hey, Stanley, you didn't file your taxes for six year, and you concealed big bucks in income.  You and your radical comrades talk about sharing the wealth; how about sharing the more than $3 million in your accounts?

 

When Stanley does his prison time, his fellow felons will, no doubt, have read about the big bucks he handled.  They are likely to presume that he has more stashed away, and take various measures to prevail upon him to share his wealth.

 

More Profitable than it Appears

Yesterday's Tax Court opinion in the case of Potter v. Commissioner, T.C. Memo  2014-18, is rather instructive:

"In December 2006 IRS special agents engaged in an undercover investigation of Potter's Pub, posing as buyers interested in acquiring the business. Petitioner assured the agents that Potter's Pub was much more profitable than it appeared. He explained that he deposited in the corporate account only enough of the business revenues to cover its expenses and that he wired the balance of its revenues to his personal bank account in Florida. These wire transfers were structured in amounts less than $10,000 to avoid reporting obligations by the bank to the IRS.  In reality, petitioner told the agents, Potter's Pub grossed more than $1 million annually and he took home between $ 400,000 and $520,000 each year. Petitioner showed the agents clandestine sales ledgers for 2003 and 2004 that supported the gross receipts he claimed, acknowledging that it might have been unwise to maintain documentary evidence of his skimming."

Understand that this is the civil side of John M. Potter's tax problems with the IRS; he already had been sentenced to 18 months for tax fraud in a plea bargain to avoid trial.

First of all, he violated the law.  And he got caught.

Secondly, he lived a high lifestyle with two vacation homes, all while reporting minimal income.  Had he only skimmed five or ten thousand a month and reported all of the remaining income, then his lifestyle would likely not have raised any particular suspicion.

Thirdly, he left an electronic trail with the wiring of funds.  If he were dealing solely in cash and kept it all in cash in his cookie jar or under his mattress, it would have been somewhat more difficult to trace.

And, of course, his big downfall was falling for the IRS special agents' ruse as prospective purchasers of the business.

Pigs get fat, but hogs get slaughtered.

This Business Stuff

Marie Baran is one of the remaining defendants in a Long Island Railroad pension fraud scheme (some of the other defendants having taken plea agreements).  Her testimony at her trial was reported in today's Newsday.  Marie had been the District Office manager for the Railroad Retirement Board, and, almost immediately upon her retirement from that Federal agency, set up shop in the free office space provided in the LIRR workers' union headquarters as a consultant to advise LIRR employees how to put in the papers to get their disability pensions and retire early.  Her own husband is an ex-LIRR worker on disability.  She charged the LIRR workers she advised $1,200 each as a consulting fee.

Marie admitted to amending her income tax return to reflect more than $50,000 additional income after she received a visit from the FBI.  She claimed that she insisted on cash payments because she didn't want to have to worry about bounced checks, and that hiding income was the furthest thing from her mind. 

She further claimed that the $50,000 + underreported from her initial return was an honest mistake.  " 'I wasn't very good at this business stuff,' she testified. 'I didn't keep records the first year. When I did my taxes, I just winged it.'"

I wasn't there; I only know what I read in Newsday.  The judge and jury are best postured to evaluate the testimony of the witnesses, and I do not now purport to second-guess them.  Nevertheless, I shall exercise my First Amendment rights and proffer my personal opinion:

Marie, if you held the union members in such high regard as you claimed (hey, they did, after all, give you some rent-free office digs), why couldn't you trust them to write good checks to you?  And Marie, you were not a GS-5 automaton, you were the freakin' District Office Manager of the RRB's Long Island Office!  This "business stuff" couldn't have been all that strange to you!  In fact, you couldn't have lasted more than a few weeks as District Office Manager if you were totally clueless about "this business stuff!"

I'm sure that the GS-3s, GS-4s and GS-5's I had occasion to supervise during my Federal employment years (who, notwithstanding their low scope of authority, job functions and salaries, were certainly not automatons) would not have missed the $50K+ discrepancy you claimed was an innocent error.  They understood "this business stuff!"

Marie, I think that you now stand a good chance of getting some rent-free housing from the Federal government!  In a Big House!

Tax Fraud on Film

Right now, the American religious Jewish community's big domestic story (the big international one, of course, being Barack Hussein Obama throwing Israel under the bus on the eve of Prime Minister Netanyahu's visit to Washington) is the sentencing in Iowa of filmmaker Wendy Runge to 10 years for tax fraud in connection with claiming false tax credits for films she shot (or, apparently in some cases, didn't shoot) in Iowa. Everyone seems to be portraying Wendy as a naïve victim of circumstance, and suggesting, none too subtly, that anti-Semitism played a role in the sentence.

Yes, I do believe that the sentence is a bit on the stiff side. And, having grown up in an environment where Jewish people were in the minority, I am fully aware of the mechanics of anti-Semitism in places away from dense Jewish populations, and cannot totally eliminate it as a possible element. One take on this all, with which I largely but not totally agree, is an "Open Letter" in the 5 Towns Jewish Times by Rabbi Binyamin Goldfarb.

It must be remembered that Wendy seems to have a sense of entitlement to swindle the government. She has shown no credible contrition. And it is not just Wendy! We have had lots more, from diverse quarters of the so-called "religious" Jewish world (you have read them, and I shall not now glorify them by linking to them). As mentioned elsewhere, they may be insular, but they are not more religious than I am. Jewish law prohibits stealing, even when the victim is a sovereign government or an insurance company.

Hardly a week, and nary a fortnight, passes without some sort of entreaty in the snail mail, e-mail or in person to help some poor, hapless religious Jewish boy (or, now that Wendy is going to the slammer, girl), from a fine family, who is unjustly incarcerated because he or she didn't comprehend the complexities of the tax laws. And quite frankly, I am tired of it! Might all of the money the Jewish community contributes to these tax and revenue cheats be put to better use in feeding, clothing and sheltering some poor and needy Jewish individuals and families who obey the law?

So let's compare Wendy's sentence to some other recent ones (I haven't the time to do any detailed research on this):

Roger Waldner, who swindled more than $1.7 million in a bankruptcy proceeding, got a 120 month sentence (that's 10 years, for the mathematically-challenged).

And, on 17 May 2011, the very same day Wendy got her sentence imposed, Dr. Mark E. Hopkins, who caused the IRS a tax loss in excess of $2.1 million, was sentenced in a different court by a different judge to 120 months (10 years) in prison.

The sentence imposed upon Wendy Weiner Runge, who cheated the State of Iowa out of about $1.9 million in tax credits, may well be harsh. But it certainly is in the ballpark as far as prison sentences go.

I have long been a firm believer in the maxim that if you cannot do the time, then don't do the crime!

The Holocaust as an Excuse

What was Jack Barouh's rationale for tax-cheating? He blamed it on the Holocaust!

Barouh's parents fled the Nazis, and that experience, Jack claims, led him to hide his assets in a UBS Bank Account in Switzerland in case the Nazi regime returns.

Jack got some jail time instead of the home detention his attorney had requested.

I shall not now get into the psychological issues regarding Holocaust survivors, other than to say that they can be very, very difficult people to deal with. Ditto for their children. But there are plenty of survivors and children of survivors who are far, far more grateful to the United States, where they found life and freedom, than Jack Barouh. The one who comes to mind is a woman I once had the challenge of supervising, an Auschwitz survivor who could easily have gone out on a mental disability, but who insisted, from sheer gratitude, upon remaining employed by the U.S. Government. And I knew another woman, whose family got out of Beograd just 3 weeks before Hitler's army marched in and started killing the Jews and others, who had the brains, beauty and personality to work anywhere she wished, but who, out of similar gratitude, remained employed by various agencies of the U.S. Government (including the IRS).

I personally know plenty of other Holocaust survivors and children of Holocaust survivors who are/were employed by the Internal Revenue Service. They certainly are not buying Jack's explanation. Nor, for that matter, am I.

A Spanking for Spinka, Part 2

This Blog's posting of 15 July 2009 discussed some broader implications of the plea agreement entered into by Naftali Tzvi Weisz, the Grand Rabbi of Spinka, in connection with his criminal money laundering charges. The subsequent posting of 31 July 2009 mentioned some of the contritionary acts and statements made by the Rabbi as he awaited sentencing.

Yesterday, in Los Angeles, U.S. District Judge John F. Walter imposed the sentence. The following matters are noted:

1. The statutory maximum for the offense is 5 years incarceration, plus 3 years supervised release, plus monetary fines. The plea agreement provided that the Rabbi would face no more than 3 years. The sentence actually imposed by Judge Walter was 2 years.

2. Yeshiva Imrei Yosef, one of the Spinka charitable institutions involved in the scheme, also pleaded guilty, and is slated to be sentenced in January 2010. It is not practical to incarcerate a corporation, but it can be fined, and such fines can result in the discontinuance of its existence. It is noted that the Spinka institutions, with the approval and encouragement of some major Rabbis connected with the Agudath Israel of America, are currently engaged in a campaign to collect money (and have an Internet presence for doing so, notwithstanding the many broad brush condemnations of the Internet by those same rabbis). I have received their solicitations, which tug at the heart strings and ask me to think of the innocent children whose education is now jeopardized. I agree with Rabbi Harry Maryles that if the good works done by the Spinka institutions are worthy of support, then the institutions should sever their connections with the Spinka hierarchy.

3. Leslie P. DeMarco, the ranking FBI Special Agent in Los Angeles, insinuated a quote into the US Attorney's press release: "Grand Rabbi Naftali Weisz exploited his position in the community, knowingly using the Spinka charitable organizations for the benefit of greedy donors. Today's sentencings close this aspect of the investigation. The donors, who were refunded up to 95 percent of the contributions they made to the Spinka charities but falsely claimed a charitable contribution deduction for the entire donation, are put on notice that they, too, have committed a crime, and that crime is tax fraud."


My take on it all:

Special Agent DeMarco's statement is an unambiguously clear signal that additional repercussions are in the pipeline. There is no doubt that scrutiny of the list of Spinka contributors has already begun. Rumors already are circulating, to the effect that one or more of the Spinka contributors have already cut deals with the IRS in order to avoid prosecution (or at least lessen the severity of criminal liability). I do not doubt that those who participated in the Spinka tax scam who have not come forward can expect some unpleasant visitors in the near future.

As for the Rabbi's sentence: The Rabbi got two years when he could have been slapped with three. That the Rabbi has been contrite is no secret. It is almost a given that he has encouraged his donors to make amends, and this has probably played a role in his sentence reduction.

The real question is whether the Rabbi has done more than that in return for the lenity he received. Has he, for example, provided or facilitated the provision of valuable information regarding transactions of others beyond the pale of the Spinka institutions?

A Session for Confession

The 15 July 2009 posting regarding the Spinka scandal and the Agudath Israel stated:


"The Agudath Israel needs to take corrective discipline with its misbehaving bratty children, instead of trying to convince the principal to not suspend the kids each time they misbehave. It should position itself as a proponent of compliance with tax laws instead of as a cover-upper of tax cheats, and as a proponent of zero tolerance for sexual abusers instead of a cover-upper of sexual abuse. This will take some practical leadership."


Perhaps the Agudath Israel is coming through. In a hurried response to the mass arrests in New Jersey (which only exacerbate the AI's increasingly embarassing public image), the AI convened a hastily-planned symposium (for men only, but that's a whole separate issue). The speakers at the symposium included none other than Naftali Tzvi Weisz, the Grand Rabbi of Spinka, who spoke some very contrite words. The speakers also included high-profile criminal defense attorney Benjamin Brafman, who said many of the things I have been saying for years. The videos of the event are very, very interesting, and can be viewed here if you have the time and inclination.


My take on it:

(A) Rabbi Chaim Dovid Zwiebel recently assumed the post of Executive Vice President of the Agudath Israel of America. He is a lawyer, and understands many of the legal nuances involved far better than mere rabbis.

(B) The Spinka Rebbe, having signed the tentative plea agreement, now has to do all sorts of contritional acts. Moreover, the plea agreement is a "package deal" contingent upon, inter alia, "a case disposition agreement executed by representatives of Spinka and all of its constituent organizations." The Rebbe's reference in his discourse to various watchdog-type committees is probably a reference to the terms and conditions of such case disposition agreements.

(C) In one of the videos, (approx. 2:00), Ben Brafman tells a semi-humorous story wherein he attended a minyan (English translation: A group of at least 10 Jewish men convened for prayer service) to say Kaddish for his father, and the guy selected to lead was his former client. Understand that Ben Brafman's clients are all criminal defendants. This, no doubt, made many of the AI hierarchy people in attendance wince.

(D) This symposium would have been unimaginable a year ago. But now, AA seems to be moving rapidly out of denial mode and is confronting problems which, only a short while ago, it would never admit existed. With the Jersey arrests making the headlines, the AI hierarchy now is beginning to realize that it can no longer go about delivering the morality lecture when so many members of so many of its affiliated groups are not behaving in a moral manner. Expect more events and missives with the new "obey the laws" message!

(E) Personal sentiment: It would not surprise me in the least if, within the next few months or years, the Agudath Israel of America erects a website. I leave it to those in the pari-mutuel profession to assign particular odds to particular time frames.

Portraying the Wrong Picture

The news story now making the rounds (as in here and here and here) is about how certain newspapers in Israel photoshopped the women out of the news photo of the new Israeli Cabinet.

The fact is that in some religious circles, portraying a woman in a photograph is considered immodest. The newspapers at issue here are published by and for such segments of the population, therefore, they do not publish photographs which portray women. In fact, some have been known to insist that all photographs of people, even of males, are prohibited.

This posting shall not now get into the issues of whether pixelating or airbrushing out the women out from the group photo is or is not more journalistically ethical than rearranging the positions of the entire group so as to exclude the women, or whether it would or would not be better to not publish the photo at all.

What this post WILL address is the implication, in news stories such as the one at issue, that those Jewish people who eschew photographs of women are somehow "more religious" than those who do not.

Imprimis, I detest the use of the term "ultraorthodox" to describe any Jewish person. The use of the "U" word serves only to fragment the Jewish people, and to subject those of us who adhere to the Torah commandments to ridicule.

There are many groups of religious Jews who, for many generations, chose to stay isolated to one extent or another from society at large. Even when contact and communication could not be avoided, such groups have retained costume and custom which differs from the general norm. They are, in a word, insular. They have always been around, but in today's world of rapid transportation and communication, these groups now are noticed by more and more people who, even twenty years ago, would have been oblivious to their existence. Many of their practices are based more upon group traditions than upon any mandate from the Torah.

I have no particular quarrel with such groups; indeed, I regularly interact with many to one extent or another. And I read several publications whose intended readership is such groups [N.B. The Israeli "Yated Ne'eman" mentioned in the story officially split from the American publication of the same title a number of years ago; let us say that they now are divorced but they still sleep together.]. Such newspapers -- and their readerships -- have the right to decide which photographs will or will not be published in their pages.

As for my religious observance, I daven (pray) three times each day, keep the Sabbath and the dietary laws, and, in a few days, will observe the Passover. For the record, I personally have no religious issues with photographs of women who are decently clad. And, not that it really, really matters, but I wear a kippah and my wife covers her hair with a wig or a snood. Those who happen to wear the black hats but who are sex offenders, tax cheats, womanizers, or even ordinary murderers may well be more insular than I am, but they are not more religious!

Do not confuse insularity with religiousity!

Iron Bars do not a Prison Make

President Bush has signed H.R. 7802, which is now Public Law No. 110-428 [The GPO has yet to post it, but give them a week or two or three.] We now have on the books the Inmate Tax Fraud Prevention Act of 2008.

Background: There are significant restrictions as to when, to whom and how much information from taxpayers' tax returns may be disclosed by the IRS. This is a good, nay, vital requirement, because nobody in their sound mind would file a tax return with the IRS if they thought the info on the tax return would become public information. But there are circumstances where tax return information must be disclosed, and so, Internal Revenue Code Section 6103 sets forth the particulars. [N.B. The version hyperlinked in this post, on the GPO website, is NOT the latest version, but if you look at it you will get an idea of Section 6103's general scheme, and general prolix verbosity.].

It seems that it is possible to outsmart the IRS by filing a tax return claiming a refund when no refund is actually warranted, because the IRS sends out the refund checks before auditing the tax return. This in and of itself is not so bad, BUT, there the criminals out there not only cheat on their own tax returns, but file false returns in the name of other people as well.


Taking it a step further, prisoners can and do successfully file false tax returns from the security of inside the prison walls. From Florida prisoners alone, there were fraudulent returns of over $4 million filed (at least that is what the IRS caught). A South Carolina inmate admitted at a Congressional hearing that he filed over 600 returns for himself or other inmates, face value approximately $3.5 million, approximately 90% of which were "successful."

More disturbing still, according to this South Carolina inmate, is that most of the money goes to the illegal drug market, and, he paid protection money to the Muslims in the prison to ensure his personal safety.


And so, President Bush has signed into law the Inmate Tax Fraud Prevention Act of 2008. In addition to a little rider that protects the pensions of retired federal judges for their widows and other surviving relatives, the Act adds Section 6103(k)(10) to the Internal Revenue Code, which permits the IRS to disclose tax return information on Federal inmates suspected of tax return fraud to the Federal Bureau of Prisons.

To which I say "Bravissimo!!"

But:

(A) The provision currently sunsets after 2011; and

(B) The IRS still cannot disclose the info to State prison officials, effectively leaving people like the South Carolina inmate out of the IRS's reach.

It is not a totally bad thing that Congress is proceeding with caution in tinkering with the disclosure provisions of Section 6103. But I hope that this obviously experimental legislation proves to be successful enough to warrant the removal of the sunset provision, and its expansion to include state inmates within the sweep of the statute.

Does the Rabbi Keep a Kosher Kitchen?

.


"When the pie was opened the birds began to sing,
Wasn't that a dainty dish to set before the king!"



The news from Los Angeles is a big tax evasion and money laundering bust which has ensnared Naftali Tzvi Weisz, the Grand Rabbi of Spinka in Boro Park. The details of the bust, including whether or not Rabbi Weisz is or is not innocent or guilty, are not particularly relevant for the purposes of this blog posting. All of the suspects are presumed innocent until proven guilty, and such presumption will pertain to this posting as well.

Imprimis, there are a number of rabbis who are known as the Grand Rabbi of the Spinka hassidim. Thus, Rebbetzin Sarah Bluma Horowitz, the Spinka Rebbetzin who died in a tragic traffic accident in the summer of 2006, was married to a different Spinka Grand Rabbi (and she might still be alive today had she been wearing a seatbelt, but that's a whole different ball of wax).

Assuming, again, that the Rabbi is in fact innocent and will ultimately be exonerated from these charges, the very fact of the indictment and arrest are problematic. I have taught my son to respect rabbis (though, like his father, he does question them from time to time), and I want people to know that the Torah is a good thing and that my religious Jewish lifestyle is a good thing.

Even if the Rabbi is exonerated, the very fact of his arrest and indictment has complicated my life, even though I am not connected with the Rabbi's religious institutions, do not live in the Rabbi's neighborhood, and indeed, do not recall ever meeting him. From my days with the various government agencies, the rule was (and still is) that avoiding impropriety is not enough; the very appearance of impropriety must also be avoided.

And, of course, the enemies of the Jewish people will also try to get some traction out of this one.

I have read the 40-page Indictment instrument (which does not seem to be posted anywhere, but which was graciously e-mailed to me by the Public Affairs Officer in the U.S. Attorney's office). Seems that there is an unindicted co-conspirator, one "R.K.," who seems to be cooperating with the prosecution. Most social groups view snitches with at least some degree of negativity; in the religious Jewish community this degree of negativity rises to the level of disdain and revulsion. Is "R.K." singing in return for lenity? Very likely! But, from a prosecutorial standpoint, the question must also be asked as to just how credible a witness he might make. My take on it: Excellent chance that if the matter goes to trial, "R.K." will be put on the witness stand and will sing his song of sixpence before the jury. But "R.K.'s" testimony will likely not be the prosecution's sole (or even chief) evidence. From the transactions described in the Indictment, there likely will be a confirmatory paper trail.

In the Spring of 2004, the IRS sent out numerous signals that it would soon be paying enhanced attention to tax-exempt organizations. Then IRS Commissioner Mark W. Everson, in his testimony before the Senate Finance Committee, gave hints that churches and similar religious organizations would thenceforth no longer be sacrosanctly immune from the IRS's scrutiny.

The first sentence of the US Attorney's press release announcing the indictment reads as follows:


"The Grand Rabbi of Spinka, a religious group within Orthodox Judaism, was arrested this morning along with several associates charged in an indictment that alleges a wide-ranging conspiracy to defraud U.S. government agencies, to operate a underground money transfer system and to launder money through an Israeli bank."


And of what relevance, many are now asking, is the fact the people involved may be Orthodox Jews? Isn't that first sentence grounded in some sort of bigotry?

My take on it: No! The fact that the defendants are Orthodox Jews is only incidental. But the fact that it involves religious organizations is paramount!! The press release is sending the metamessage that religious groups can no longer find refuge in their religious observance from the requirements to obey the tax laws!

Of no less significance than the first sentence in the US Attorney's press release is the last sentence in the document: "The case is part of an ongoing investigation being conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation."

"Ongoing investigation?" I very strongly anticipate some additional blackbirds to come out of the pie.

I certainly hope that the Rabbi is exonerated in the proceedings to follow, but am not willing to make book that such a state of affairs is in fact the case. Let the legal process move forward, and let the chips fall wherever they may.

Responsibility for the Illegal Aliens

This seems counterintuitive at first: Judge Rolando Acosta ruled that undocumented aliens could pursue their lost wages claims against their former employers, and that the defendant former employers could not inquire as to the plaintiffs' residency status. Gomez v. F & T Int'l (Flushing, NY) LLC, 2007 NY Slip Op 27269, 2007 N.Y. Misc. LEXIS 4646, N.Y.L.J., 16 July 2007, p. 22 (Sup. Ct. N.Y. Co. 2007).

Actually, Judge Acosta was right on the money. The two injured illegals who worked for the building demolition contractor were paid off the books, and were never asked for and never did submit any papers purporting to document their status. As Judge Acosta put it, "[n]ow that plaintiffs are injured and seeking lost wages, the owner and general contractor are suddenly concerned with plaintiffs' alien status and income tax returns."

The employers who were hiring the illegals took little to no safety precautions for employers who used tools such as wirecutters (the big kind for structural concrete reinforcement wires) and jackhammers. They paid them off the books, asked no questions, and knew damn well that the illegals were illegals. Now, Judge Acosta is effectively making them take responsibility for the very severe injuries the workers incurred.

This is one of those "clean up the garbage and the rats will go away" situations. As long as there is incentive for employers to hire illegals, the illegals will come here. And the problem is particularly recalcitrant in the building industry, especially the demolition segment of the building industry.

The windfall to the illegals is a relatively small price to pay for bringing responsibility to the building industry. And, if the injuries sustained by these illegals are half as serious as purported, then most of that money will be plowed back into the health care system (which is a morass unto itself).

And, if the IRS is on its toes, there will be consequences to the employers for the off-the-books wages.

Ambulance Disservice

When the recent scandal regarding misuse of funds at various Long Island volunteer fire companies was breaking, I was ready to bet the mortgage money that there were more such instances in other localities, perhaps a bit more egregious. Unfortunately, nobody took me up on the wager.

Harvey S. Grossman, the ex-Treasurer of the Plymouth Community Ambulance Association has just been sentenced to 5 to 20 years for using over $2 Million in PCAA funds for personal expenses such as furniture, home improvements, travel, jet skis, his daughter's bat mitzvah party, racing his stock car, et cetera.

Co-defendants Jeff Cohen and George Gilliano, who didn't embezzle nearly as much as Grossman did and who apparently cooperated in making the case against Grossman, are slated for sentencing in a week and a half. The way I'm calling it: Jeff and George have good odds for seeing some amount of jail time, but not nearly as much as Harvey got.

And the way I'm calling it for Harvey: In 5 years, when he theoretically becomes eligible for release, the IRS crackdown against abuses by nonprofit organizations will have raised the public consciousness so as to make it politically unwise to spring Mr. Grossman the first time up. But he is likely to behave reasonably well in prison, so he is quite unlikely to stay in for the entire 20 years.

[Disclosure: A number of years ago, under circumstances having no relevance to the Blog and having no relevance to ambulances, I had several occasions to respectively meet both Harvey and Jeff. I do not recall ever meeting with George Gilliano.].

It is a maxim among tax enforcement personnel, in whose ranks I formerly served, that whenever money changes hands, information also changes hands. I have no particular personal ill will towards Harvey or Jeff (or, for that matter, George), but am taken aback by the crass stupidity respectively displayed by two individuals of above-average intelligence. The embezzled funds were, by and large, filched via credit card and check, two money transfer modes which tend to leave clear verifiable trails of information. If Harvey would have been content with less than two million bucks, he could have found some indirect ways to transfer assets without the tracking inherent in credit card postings and checking account drafts. Like syphoning a few gallons of gasoline from an ambulance every week, grabbing an occasional gallon of windshield washer fluid, et cetera.


This, by the way, is quite likely just the beginning of Harvey's and Jeff's and George's legal problems. Surely the IRS smells some tax potential in their cases. Embezzled funds count as gross income for taxation purposes, so Harvey, Jeff and George can expect to hear from the IRS (if they have not been contacted by the IRS already).

But never mind the income tax. The Internal Revenue Code also provides for what are euphemistically called "excise taxes" on improper transactions between tax-exempt organizations and the key personnel thereof. Without going into the complex convolutions of the Internal Revenue Code, there are instances, possibly applicable to at least some extent here, where the "excise tax" is equal to twice the benefit received! It is also worth noting that where there are more than one individuals involved in the scheme, they all can be jointly and severally liable for this "excise tax."

So, in addition to having to reimburse the PCAA, Harvey, Jeff and George most likely have some accounts to settle with the IRS (and, for that matter, the Pennsylvania Department of Revenue).

And if that were not problematic enough, I will note that the Form 990 which tax-exempt organizations are required to file with the IRS is, unlike other tax returns, open to public inspection. It takes a while for these forms to post on the Internet, but the PCAA 990s for 2003 and 2004 were each signed by Harvey. One need not be a tax lawyer with a MBA to know that Internal Revenue Code provides criminal penalties for filing false tax returns. Well, the IRS knows where to find Harvey for the next 5+ years.

I do feel bad for Jeff and Harvey (and George, too, even though I have never met him). But I feel even worse for the taxpayers of Plymouth Township.