A former Cozen O’Connor real estate attorney was sentenced to 70 months in federal prison after he was convicted on charges related to diverting fees from the law firm and not declaring that as income on his tax returns.
The sentence issued for Charles Naselsky by U.S. District Judge Paul S. Diamond of the Eastern District of Pennsylvania fell within the sentencing guidelines of 57 to 71 months, said Naselsky’s attorney, Robert Welsh of Welsh & Recker.
"The court had indicated it was considering an upward variance and in the end it decided not to do that and in the end it was a relief," Welsh said.
Maria M. Carrillo, of the Department of Justice’s Tax Division, said the judge increased the sentencing guidelines range Tuesday after hearing evidence from the prosecution of additional alleged illegal conduct that occurred around the same time as the conduct that resulted in the charges against Naselsky. That additional evidence increased the loss amount under the fraud offenses, and therefore increased the guidelines range, she said. The judge then gave a sentence toward the top of that range.
"We asked for 70 months so we’re very pleased with the sentence in that we think it represents … the seriousness of the offenses," Carrillo said. "This was a licensed attorney who was sworn to uphold the law and instead of upholding it he violated it over and over and over again."
Carrillo said the sentence sends a clear message to "other corrupt attorneys, fraudsters, tax cheats" and others who are involved in similar crimes that the behavior will not be tolerated and will be "severely punished."
The judge ordered Naselsky to pay Cozen O’Connor $290,000, $135,000 to the Internal Revenue Service and $290,000 in forfeiture to the federal government, Welsh said.
"We agreed on the dollar amounts," Welsh said.
Naselsky also was immediately taken into custody while Welsh had requested that Naselsky be allowed to surrender later.
In all, Naselsky was convicted of two counts of tax evasion, two counts of filing false tax returns, three counts of wire fraud, and two counts of obstruction of justice.
Naselsky worked at Cozen O’Connor for four years before joining Blank Rome in July 2006. He left Blank Rome around the time the Internal Revenue Service started investigating him, according to the indictment, to join Deeb Petrakis Blum & Murphy, where he was suspended after his indictment in 2010, The Legal previously reported.
The IRS began investigating the matter in 2008 and a federal grand jury was empaneled in June of that year, The Legal previously reported. The subject of the investigation was whether Naselsky properly reported all of his income on his 2005 and 2006 tax returns.
Naselsky "instructed some of his clients to pay him directly for professional services, despite knowing that the payments belonged entirely to the firm. He then hid that income from the IRS in order to avoid paying taxes on it and filed false income tax returns," according to a statement released by the U.S. Attorney’s Office in Philadelphia after Naselsky’s conviction.
"When he became aware that he was being investigated by the IRS for tax offenses, he obstructed the investigation by fabricating evidence, including emails, that claimed the monies were loans from a company called U.S. Equity Investors LLC (USE)," according to the release.
He owes about $112,000 in taxes for failing to report $365,000 in income in 2005 and 2006, The Legal previously reported.
Tiwana L. Wright of the Department of Justice’s Tax Division also prosecuted the case.
Gina Passarella contributed to this article.