Federal prosecutors have announced charges against a Dallas attorney accused of promoting an illegal tax shelter for his clients, according to Financial Advisor.
79-year-old Joseph Garza was indicted by a grand jury on charges including wire fraud and conspiracy to commit wire fraud, for allegedly helping high-income clients qualify for fraudulent tax deductions that reduced what they owed to the Internal Revenue Service.
Details of the indictment were released by the U.S. Attorney for the Northern District of Texas, Chad E. Meacham. He said that from 2012 to 2021, “Garza and his co-conspirators allegedly directed the clients to transfer funds into shell companies, then returned this money to the clients, untaxed, for their own personal use.“
To conceal the scheme, prosecutors said Garza and the others allegedly commissioned fictitious business valuation reports, created invoices for fake business expenses, and drafted sham contractual agreements. The clients were able to hide a total of about $1 billion from the IRS, which lost over $200 million.
Garza was also accused of helping clients prepare and file fraudulent tax returns, falsely deducting business expenses for services that were never performed, and falsely reporting gross receipts for payments that were not earned.
“Mr. Garza exploited his position as an attorney and purported tax expert to try and legitimize his illegal tax scheme,” said Christopher J. Altemus, Jr., Special Agent in Charge of IRS Criminal Investigation Dallas Field Office. “His arrest should serve as a warning that individuals who create elaborate schemes that have no purpose other than to defraud the IRS and shift the tax burden to honest American taxpayers will be prosecuted.”
If convicted, Garza faces a maximum penalty of 20 years in prison for each of the 18 counts of wire fraud, 20 years in prison for conspiracy to commit wire fraud, and three years in prison for each of 22 counts of aiding and assisting in the filing of false federal income tax returns.
The attorneys at Lewitas Hyman have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. We bring a unique level of knowledge and experience when representing the rights of investors, including resolving cases through arbitration and litigation when necessary. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (844) 651-2643 or through our online contact form for a no-cost evaluation of your matter.