Harold Levine, the former chair of the tax practice group at Herrick, Feinstein, and a co-defendant pleaded guilty to charges that they failed to report collectively more than $4 million in income to the Internal Revenue Service, according to the Southern District U.S. Attorney’s office.
Levine, who was with Herrick Feinstein from 2003 to 2012, and Florida-based accountant Ronald Katz, each pleaded to one count of corruptly endeavoring to obstruct and impede the IRS, and one count of tax evasion. They face potential maximum prison terms of eight years.
“As tax professionals, both Harold Levine and Ronald Katz well knew their obligations to report their income to the IRS. As they have now admitted, they instead engaged in a corrupt scheme to evade taxes on millions of dollars of income,” Acting U.S. Attorney Joon Kim said in a statement Monday. “Now both defendants will be held to account for their crimes.”
According to federal prosecutors and court records, the pair evaded taxes from millions in fees from tax-shelter and other related transactions received from Levine’s work while at Herrick Feinstein.
In one instance, $520,000 in tax shelter fees were routed by Levine to RKH Real Estate Holdings, a partnership entity owned by the pair, and used to purchase a home in Levittown. The home was used as a residence for an unnamed female employee of Herrick Feinstein with whom Levine had a “close personal relationship,” according to prosecutors. The individual lived there rent-free for five years, even as Levine and Katz claimed false rental property deductions for RKH Real Estate Holdings.
In another instance, according to court documents, Levine created an invoice in Herrick’s system for $134,000 for King Louie Enterprises, an entity controlled by Katz. Levine then transferred the sum from a Herrick escrow account holding funds from a recently executed series of tax shelter transactions.
Then, $116,000 was transferred from King Louie’s account to another account, LL Real Estate Operations, which Levine controlled.
Authorities say Levine ultimately failed to report more than $3 million in income between 2005 and 2011, while Katz failed to report $1.2 million received through the scheme.
An IRS audit in late 2011 and early 2012 resulted in the tax lawyer being interviewed. During those interviews, according to court documents, Levine falsely stated that the Levittown property was a rental fetching $1,000 per month. He would go on to urge the woman staying there to lie about the rent when the IRS interviewed her in March 2013.
Levine and Katz were charged in an eight-count indicted in October 2016. In April 2017, Southern District Court Judge Jed Rakoff denied a motion to dismiss four counts in the case on statute of limitation grounds.
Gerald B. Lefcourt, the attorney for Levine, and James Froccaro Jr., the attorney for Katz, could not be reached for comment.
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