Evaded Payment of More Than $160,000 of Federal Income Tax From 2009 Through October 2019, by Concealing Proceeds of a Law Suit Settlement and Failing to File Individual Income Tax Returns from 2005 Through 2015
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Jonathan D. Larsen, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that MARC A. SEEDORF pled guilty today to tax evasion before U.S. District Judge Cathy Seibel in White Plains federal court.
U.S. Attorney Geoffrey S. Berman said: “As he admitted today, for years Marc Seedorf flouted his obligations under the law to file tax returns and to pay taxes. This was conduct that would be shameful for anyone, and all the more so from an attorney and a member of the judiciary. Now Seedorf awaits sentencing for his crime.”
IRS-CI Special Agent in Charge Jonathan D. Larsen said: “As a Lewisboro Town Justice, Mr. Seedorf knows the consequences when laws are broken. To maintain faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share. IRS-CI, together with the Department of Justice, will investigate and prosecute those who break this country’s tax laws.”
According to the allegations contained in the Information:
During the relevant time period of 2009 through October 2019, SEEDORF was a Town Justice for the Town of Lewisboro, New York. SEEDORF also received income from the private practice of law.
SEEDORF did not file U.S. Individual Income Tax Returns for the tax years 2005 through 2015, despite being required to do so. As a result of the income SEEDORF earned from 2005 through 2008, he incurred a federal income tax liability of approximately $323,000, including interest and penalties (“SEEDORF’s 2005 Through 2008 Tax Liability”). As a result of the income SEEDORF earned from 2009 through 2013, he incurred a federal income tax liability of approximately $164,000, including interest and penalties (“SEEDORF’s 2009 Through 2013 Tax Liability”).
In early August 2012, SEEDORF received $1,524,116 in connection with the settlement of a civil lawsuit. At SEEDORF’s request, the law firm that represented SEEDORF in the lawsuit (“Law Firm-1”) deposited the settlement proceeds into its attorney trust account, to be disbursed to SEEDORF at an unspecified later date. In the following years, SEEDORF instructed Law Firm-1 to disburse portions of the settlement proceeds to accounts other than his personal bank account, including his law firm’s operating account, his law firm’s attorney trust account, and his brother-in-law’s personal account, in order to disguise the source of funds he used to make payments to the IRS and other creditors, and the existence of the remainder of the settlement proceeds.
From January 2010 through June 2013, the IRS attempted to collect SEEDORF’s 2005 Through 2008 Tax Liability, including by mailing letters to SEEDORF and requesting documents and records from SEEDORF. SEEDORF failed to provide any records to the IRS or make any payment toward SEEDORF’s 2005 Through 2008 Tax Liability.
In June 2013, after the IRS initiated a process to place a levy upon an investment account held by SEEDORF, he instructed Law Firm-1 to wire $400,000 of the settlement proceeds to his own law firm’s attorney trust account, from which he then paid his outstanding 2005 Through 2008 Tax Liability. During a conversation with an IRS Revenue Officer concerning the source of these funds, SEEDORF falsely stated that he had borrowed the funds from his own law firm’s trust account.
During a December 2014 IRS interview, an IRS Revenue Agent asked SEEDORF whether he had received any non-taxable income during the period from 2009 through 2013. During the interview, SEEDORF never disclosed the 2012 law suit settlement or the existence of the more than $540,000 of settlement proceeds that remained in Law Firm-1’s attorney trust account at that time.
SEEDORF pled guilty to one count of tax evasion, which carries a maximum sentence of five years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
SEEDORF is scheduled to be sentenced by Judge Seibel on March 24, 2020, at 2:30 p.m.
Mr. Berman praised the investigative work of the IRS-CI.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney Jeffrey C. Coffman is in charge of the prosecution.