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Greenwich resident Richard Josephberg pleaded guilty in federal court in Manhattan to one count of tax evasion and three counts of willful failure to file tax returns. He was also ordered to pay $1,275,624 in restitution to the IRS and New York State Department of Taxation and Finance.
Southern District of New York U.S. Attorney Geoffrey Berman said that in pleading guilty, Josephberg admitted that he deliberately evaded the assessment of hundreds of thousands of dollars in federal income taxes by fraudulently reporting a 2011 commission of approximately $1.5 million as a long-term capital gain, which was taxed at a much lower rate than ordinary income. In addition, he admitted that he willfully failed to timely file any tax returns for the calendar years 2013 through 2015.
Late in 2010, Josephberg began working for an investment firm in Manhattan. Through the owner of that firm, Josephberg went on to secure a second, commission-based arrangement with another investment firm, which agreed to pay him a commission of approximately 15 percent of any profit generated on deals that originated through Josephberg. For brokering one such deal, Josephberg was entitled to commission payments totaling approximately $1.57 million in 2011.
After receiving payments totaling approximately $35,725 in his own name of that commission, Josephberg directed the firm to issue the remaining commission to a newly formed nominee corporate entity titled “Almorli Advisors Inc.,” where $1.53 million into a bank account in that name.
In March the following year, Berman said that Josephberg took steps to avoid paying hundreds of thousands of dollars in federal income taxes by disguising and concealing the type of income he received from the commission. Josephberg allegedly had his accountant falsify documents and claimed the commission as a long-term capital gain, rather than ordinary income.
Berman said that Josephberg’s fraudulent misclassification of this income resulted in a reported tax liability that was hundreds of thousands of dollars lower than the true tax liability because individual long-term capital gains were taxed at a significantly lower rate than ordinary income.
Josephberg also allegedly engaged in a scheme to evade the assessment of federal income taxes between 2013 and 2016, when he failed to file to file any federal income tax returns until after the IRS contacted him in May last year.
“As he admitted, Richard Josephberg defrauded the IRS and evaded taxes by disguising more than $1.5 million in income as long-term capital gain,” Berman said. “He also admitted he failed to file tax returns for four years. Now Josephberg awaits sentencing for his multifaceted tax dodge.”
In pleading guilty, Josephberg will face a maximum term of five years in prison on the tax evasion charge and one year for each of the willful failure to file tax returns charges. Josephberg is scheduled to be sentenced on July 15.
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