Los Angeles – LawFuel.com – This morning, in United States District Court in Los Angeles before the Honorable Judge J. Spencer Letts, the owner of an area art gallery was sentenced to serve 36 months in federal custody and one year supervised release for subscribing to a false tax return upon which he failed to report more than $1.1 million dollars in gross receipts to the Internal Revenue Service for the 2006 tax year.
Michael Robert Levy, 54, of Long Beach, California, admitted in his plea agreement that, during the years 2003 through 2007, he failed to report more than $3,000,000 in gross receipts to the IRS he received from the operation of his art gallery, Michael Levy Gallery.
According to the plea agreement, instead of depositing all of his gross receipts into his business account, Levy converted some of the customer checks he received through his business into cashier’s checks which he later converted into cash. By doing so, Levy hid the unreported gross receipts from his tax-return preparer who relied on Levy’s representations that all of the business receipts for the art business were deposited into his business account.
Over the course of his scheme, Levy converted over 80 checks from customers of Michael Levy Gallery into cashier’s checks without depositing them into his business bank account.
According to the plea agreement, the government asserts that the amount of tax that Levy sought to avoid paying exceeds $899,000 for the years 2003 through 2007.
In his plea agreement, Levy also agreed that he is liable for the civil fraud penalty which is assessed on the unpaid tax for the years in question.
The investigation and prosecution of Levy was conducted by IRS – Criminal Investigation and the United States Attorney’s Office’s – Tax Division in Los Angeles.
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