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Long Island resident Jordan Sudberg pleaded guilty on Tuesday, Nov. 23 to tax evasion for the calendar years 2015 through 2017, in connection with false deductions from a scheme involving his issuance of hundreds of business checks falsely purporting to be payments for business services, which he provided in exchange for cash to a black market money exchange network.
As part of his plea, Sudberg agreed to pay $551,660 in restitution to the Internal Revenue Service, and forfeit an additional $243,257.
“As he admitted in court today, Jordan Sudberg engaged in a years-long pattern of fabricating false business expenses to conceal from the IRS large portions of his substantial income earned from his medical practices," Damian Williams, the United States Attorney for the Southern District of New York, said. "He fraudulently claimed more than $1 million in deductions that should have been reported to the IRS as taxable income, and allowed other individuals to create purportedly legitimate origin for their illicit cash in the process. Now Sudberg awaits sentencing for his crime.”
According to the allegations contained in the criminal complaint to which Sudberg pleaded guilty:
- From at least 2015 through 2017, Sudberg devised and perpetrated a scheme to evade a substantial portion of his personal income taxes. During that period, he owned two S-corporations through which he operated a medical practice, specializing in pain management, at locations located in Manhattan, Long Island, and Queens.
- Sudberg issued hundreds of checks made payable to various companies and falsely purporting to be payments for business services. In fact, those companies had not performed any business services for Sudberg’s corporations. In exchange for the checks, Sudberg received sums of cash that were equal to the value of the checks minus a small fee.
- Sudberg falsely reported to the IRS that the checks were for legitimate business expenses and claimed deductions in the amount of the checks, thereby substantially understating his taxable income.
- Sudberg’s tax evasion helped support an unlicensed money services network operated by a number of co-conspirators, including Hua Fen Bi, who was sentenced by US District Judge Colleen McMahon on May 24, 2021, for his role in conspiring to operate an unlicensed money transmitting business. This network permitted individuals to exchange cash for business checks like those provided by Sudberg, thereby generating a false and nominally legitimate source of funds, including for the laundering of narcotics proceeds.
Sudberg pleaded guilty to one count of tax evasion, which carries a maximum penalty of five years in prison. He is scheduled to be sentenced on Feb. 23, 2022.
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