Chicago Area Tax Attorney Given Prison Time for NFL Tax Scam

tax fraudAfter being convicted of filing fraudulent tax returns, Chicago-area attorney Gary J. Stern sat through his two-hour long sentencing hearing. NFL stars like Terrell Owens, Adalius Thomas, Ray Lewis and Plaxico Burress alleged that they were scammed by the tax attorney.

Stern had previously been indicted by a grand jury in October 2014, after being charged with filing false income tax returns. The IRS alleged that he had impeded the agency by funneling renewable energy tax credits through multiple businesses for his wealthy clients, resulting in almost $5 million in improper tax credits. Stern was behind the creation of a business entity to develop projects that would convert methane gas into electricity to then sell to utility companies.

According to prosecutors, a minimum of 26 landfill sites were operated by the entity, which generated more than $5.3 million in tax credits for a company that was started by the same set of Stern’s clients who had formed the original business. Stern then transferred the tax credits through a number of business entities in what prosecutors believe was completed in an attempt to defraud the federal government.

According to the criminal charges, the tax shelter resulted in the filing of 55 fraudulent tax returns by 34 different individuals. According to official reports, Stern was warned that the tax shelter would not pass tax laws, but Stern continued despite this warning, believing that his clients had little chance of being subject to a civil tax audit. Prosecutors claim that almost 20 professional athletes spent over $3.7 million to purchase the fraudulent tax credits.

The United States district judge who sentenced Stern said that the scheme was very serious because it defrauded the federal government out of millions of dollars of tax revenue while also financially damaging the victims.

How the Scam Affected the Concerned NFL Players

NFL stars recounted stories during the sentencing hearing about how their credit had been drastically impacted, how they were no longer able to lease a car and how they now have huge tax bills. The tax attorney was given an 18-month prison sentence. A class-action lawsuit filed by many of the victims against Stern and his law firm has been held up since 2015 while the criminal case was pending.

According to Stern’s lawyer, Stern voluntarily relinquished his law license. He has been licensed since 1983.

Charges of filing false tax returns are serious. If you are facing fraudulent tax charges, it is important that you quickly retain an experienced tax attorney. Robert J. Fedor, Esq., LLC represents clients in Cleveland, Chicago and surrounding areas. Contact us at 1-800-579-0097.

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