Like many people I never thought I would be arrested, the idea that I could be arrested and put in prison was something I could never imagine. After all, I wasn’t doing anything wrong. Sure, I took some extra deductions on my taxes, but nothing criminal, or so I thought.
The fact is, it is very easy for the government to convict you of a crime, in some cases they don’t even need proof of a crime, a “conspiracy” is essentially the government’s catch all for crimes that they have no proof for. I was convicted on two counts; one count of conspiracy to commit wire fraud, and one count of filing a false tax return in 2012. Candidly, I did cheat on my taxes, I took a large deduction I should not have taken. I never thought it was something that I could be imprisoned for. I knew that if the IRS caught it, I would get a fine and have to pay the taxes plus interest, but never did I think I could be arrested. That tax deduction, however, gave the government the leverage they needed to get me to take a plea for the conspiracy charge.
My former business partners and I were indicted based on an accusation made by a competitor. This person was a disgruntled sales representative who left our company to start his own venture. When his new venture failed, he decided to get vengeance. He hired a former IT worker from our company who provided him stolen reports from which he tried to create a case that we were stealing from our investors. Ultimately it was difficult to make a case that we stole from our investors when they made a return of 260%, they were actually paid $13.2 million on a $5.5 million investment, not a bad deal! That would not make a great case for a jury, telling them that a bunch of millionaire investors only made $13 million on their $5 million investment.
The government needed us to take a plea, but to that they needed leverage. Our plan was to fight the government in court, we felt that we had a very strong chance to succeed, that was until my attorney told me about an email between one of my business partners and our CFO. In that email my business partner was asking the company CFO to help him cheat on his taxes. That email was the smoking gun the feds needed. That was the day my attorney suggested I take a plea, whether we were innocent or guilty on the other charges no longer mattered, the jury would hear that we cheated on our taxes and therefore we probably did the other things the government alleged.
Now I was faced with 51-63 months in prison if we lost at trial, or if I took a plea, home confinement and probation. Prison was still not a consideration…
I am sharing my story because I never thought of myself as a criminal, I still don’t. But my story should serve as a warning that this could happen to anyone in business. Alan Dershowitz authored a book called Three Felonies a Day, where he clearly shows us how my story is typical and is happening to others around this country every day.