A Toms River attorney was arrested this morning and charged with tax evasion, according to federal authorities.
Lee Gottesman, 56, of Toms River, was charged by indictment with evading federal income taxes and failing to pay payroll taxes for the employees of his law firm, according to federal authorities.
Gottesman, who has an office on Main Street, was arrested this morning at his home in Toms River by IRS-Criminal Investigators, U.S. Attorney Paul Fishman announced.
The charges are based on the tax years 2006 through 2009, according to federal authorities.
According to a federal indictment unsealed today, Gottesman faces four counts of personal income tax evasion and 15 counts of willful failure to pay payroll taxes.
The alleged evasion is on $440,000 in income, incurring more than $110,000 in income tax liability. Fishman said Gottesman allegedly did not pay any personal income tax for this period, nor did he file any personal tax returns.
"Also during that period, Gottesman employed attorneys and secretaries, withheld payroll and other taxes from the employees’ pay, but never turned these withheld payments over to the IRS, nor did he file the required forms with the IRS," according to a release this morning by Fishman's office.
Problems allegedly began in 2002, Fishman said, when the IRS filed a levy on Gottesman’s assets because of unpaid taxes. He opened a sub account under his wive's name in an attorney trust, though his wife was not a client. Gottesman then began to run substantially all of his personal and business expenses through the sub account, and closed all other business and personal accounts held in his name, federal authorities claim.
Fishman said Gottesman’s payments from the sub account allegedly included:
- more than $90,000 in mortgage payments for his home;
- more than $17,000 in household expenses, including maintenance on his pool, landscaping services, and construction costs;
- and thousands of dollars in other personal expenses, such as life insurance premiums, auto body repair work, and personal credit card payments.
He is scheduled to appear before Magistrate Judge Patty Shwartz in Newark United States District Court 2:15 p.m. today.
Gottesman would face maximum penalty of five years in prison and a $250,000 fine for the four tax evasion counts. Each of the 14 payroll tax counts is
punishable by a maximum potential penalty of five years in prison and a $10,000 fine, Fishman said.