Real estate attorney Charles M. Naselsky was indicted Tuesday for two counts of tax evasion, two counts of filing a false tax return, three counts of wire fraud and two counts of obstruction of justice after he allegedly stole $380,000 from an unnamed law firm where he worked, according to the indictment unsealed Wednesday.
Naselsky worked at Cozen O’Connor for four years before joining Blank Rome in July 2006. He left that firm in August 2009, right around the time the IRS started investigating him according to the indictment, to join Deeb Petrakis Blum & Murphy where he has been for the last year. According to sources and the timeline outlined in the indictment, Naselsky was with Cozen O’Connor during the relevant times of the alleged tax evasion and fraud.
Naselsky was arraigned Wednesday and released on his own recognizance on $75,000 bail. He pled not guilty to all counts.
“Mr. Naselsky looks forward to both addressing this matter and resolving it promptly,” Naselsky’s attorney, Thomas W. Ostrander of Duane Morris, said Thursday, declining to comment further.
Blank Rome spokesman Topper Ray said Naselsky’s alleged conduct did not occur at Blank Rome. The timeline offered up in the indictment refers to dates when Naselsky was at Cozen O’Connor. A Cozen O’Connor spokeswoman speaking on behalf of President Thomas A. “Tad” Decker said the firm could not comment because this is a criminal matter.
According to the indictment, Naselsky hid certain income and evaded paying federal income tax for the years 2005 and 2006 by directing clients to pay him directly rather than his law firm. When the IRS learned of Naselsky’s alleged tax fraud scheme and began an investigation, he allegedly obstructed the investigation by attempting to get witnesses to lie to investigators and created false documents, the indictment stated.
Naselsky failed to report $190,000 in income for the calendar year 2005 and failed to report $175,000 for the calendar year 2006, the grand jury alleged in its indictment
From September 2005 to January 2007, the grand jury said in the indictment, Naselsky devised a plan to defraud and obtain money and property “by means of false and fraudulent pretenses, representations and promises.”
During that time, Naselsky represented several businessmen in real estate development projects in the Philadelphia area. Those clients were listed in the indictment only as H.C., R.C., D.G. and D.P. During that representation, Naselsky was with “a large Philadelphia law firm” listed in the indictment only as “Law Firm No. 1.”
While at Law Firm No. 1, all fees earned by Naselsky were to go to the firm. In violation of the terms of his employment, he allegedly directed clients to make payments directly to him and he failed to disclose those payments to the firm, according to the indictment.
“In total, defendant Naselsky received $380,000 in improper payments in this manner,” the indictment stated. “At the time he directed his clients to make payments to him directly, defendant Naselsky’s clients owed Law Firm No. 1 hundreds of thousands of dollars in fees.”
According to the indictment, on Sept. 21, 2005, Naselsky cleared a $150,000 check drawn on an account of Sant Properties that was made out to Naselsky. On Nov. 21, 2005, he cleared a $40,000 check made out to himself on an account of Sant Properties. On Jan. 20, 2006, Naselsky cleared a $100,000 check drawn on an account of 1500 Walnut Partners LP made out to himself. The indictment does not elaborate as to what Sant Properties or 1500 Walnut Partners are.
The IRS began investigating the matter in 2008 and a federal grand jury was empaneled in June of that year. The subject of the investigation was whether Naselsky properly reported all of his income on his 2005 and 2006 tax returns, including payments of $75,000 from H.C. and R.C., $100,000 from D.G., and another $190,000 from H.C. and R.C.
In order to make it appear the $190,000 in payments from H.C. and R.C. were nontaxable loans, Naselsky allegedly sent an e-mail May 15, 2009 to D.P., a person from whom one of Naselsky’s entities had obtained unrelated loans. In that e-mail, Naselsky falsely claimed the $190,000 in payments were nontaxable loans and then cited this to federal investigators in support of his attempt to show the payments were not taxable, according to the indictment.
Naselsky allegedly did the same thing on Dec. 8, 2009 and included in that e-mail that he possessed “‘signed notes’” evidencing the loans. Both e-mails were cited in the grand jury indictment as evidence of obstruction of justice.
Jonathan M. Petrakis, president of Deeb Petrakis said that in light of the indictment, “We really have been left with no choice but to suspend him from employment with our firm while the process runs its course.”
“We are obviously very disturbed by the indictment,” Petrakis said. “We cannot comment on its content because all of the alleged conduct at issue occurred well prior to his employment with our firm.”
Petrakis added that during the time Naselsky has been with the firm, “we have found him to be the consummate professional.” •