A Fraud Within a Fraud

June 6, 2012 — 1 Comment

The Bernie Madoff Ponzie scheme was perhaps one of the most catastrophic financial disasters in recent history. Now, new problems are developing for one former Madoff employee. Craig Kugel, a human resources employee at Bernard L. Madoff Investment Securities LLC from 2001 to 2008, pleaded guilty to five charges unrelated to the Madoff fraud on Tuesday. Kugel, however, admitted to sending forms to the U.S. Department of Labor in regards to people who were not actually employed by the firm even though they were on payroll and entitled to benefits. In addition, he admitted to filing false U.S. tax returns in their names as an attempt to legitimize his fraud.

Just last November, Craig Kugel’s father, David Kugel, pleaded guilty to six criminal charges before the same judge. David Kugel admitted to administering false trades and creating fake records. He is still under trial.

“I want to make clear I was never involved in the Madoff Ponzi scheme and never worked in its trading department,” Craig Kugel said.

Beyond creating three fake employees, Craig Kugel also charged more than $200,000 in personal expenses to the corporate credit card and did not report it as income on his tax returns. All of the charges combined can carry a maximum prison term of 19 years.

There are several ways Craig Kugel evaded and misled the IRS. Perhaps the most detrimental was creating fake employees, but spending money on the company’s credit card for personal reasons comes in a close second. Tax fraud is extremely dangerous and should not be attempted by anyone. If you find yourself in legal trouble, please contact our law offices for consultation.

JDKatz, P.C. is a full-service law firm focused on tax law and estate planning.  We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.

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  1. A Fraud Within a Fraud | The Joy of Tax Law | Tax Attorney - June 7, 2012

    […] posted here: A Fraud Within a Fraud | The Joy of Tax Law Segnala presso: This entry was posted in Uncategorized and tagged bernie, bernie-madoff, […]

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