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Kushner brother-in-law loses tax fraud appeal

Photo Credit: Cliffview Pilot

A federal appeals court has upheld the tax-fraud conviction of real estate magnate Charles Kushner’s brother-in-law, agreeing that “willful blindness” of his duties involving accountants who helped Kushner Cos. illegally write off millions in charitable and political donations was no defense.

Charles Kushner

Richard Stadtmauer, an accountant and law school graduate, began working for “Charlie” Kushner in 1985 and eventually became executive vice-president of the company.

A federal judge sentenced Stadtmauer to 38 months in federal prison for the conviction. Kushner already had been released after serving 16 months for his admitted role in the tax fraud.

Federal authorities were probing Kushner when they raised charges against Stadtmauer of conspiring to take $6 million in improper deductions on tax returns from 1998 to 2001 for a dozen Kushner-owned limited partnerships.

A separate jury later determined that Stadtmauer “deliberately closed his … eyes to what he … had every reason to believe,” according to U.S. District Court Judge Jose Linares. “No one can avoid responsibility for a crime by deliberately avoiding what is obvious.”

Stadtmauer appealed and lost. No word yet on whether he intends to go to the U.S. Supreme Court.

“Stadtmauer’s attempt to equate a person who deliberately avoids learning of a legal duty with a person … who is ignorant of that duty by virtue of a good-faith belief or misunderstanding is not persuasive,” wrote Judge Thomas Ambro, joined by Ruggero Aldisert and Jane Roth.

Stadtmauer claimed he relied on his accountants to follow the law.

However, Ambro wrote, it’s equally possible that Stadtmauer “deliberately avoided asking the natural follow-up questions — e.g., whether the deductions claimed in the tax returns were consistent with how expenses were falsely characterized in the general ledgers and reported on the financial statements — despite his awareness of a high probability of that fact.”

Once one of the most powerful people in New Jersey, atop an empire valued at up to $2 billion, Kushner — a former aide and top campaign donor to ex-Gov. Jim McGreevy — first made headlines when he admitted trying to use a prostitute to blackmail his brother-in-law. Authorities were alerted by members of his own family.

It was later learned that Kushner also sponsored the work visa for McGreevey’s male lover, Golan Cipel.

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