Taxable Talk

As a published author I know that finding the right title for a book can be a difficult task. My writing partner and I struggled with the title for our first book while for our second book we chose the title and then wrote the book.

Last November I detailed the indictment handed down to Bernard Bagdis and ten other individuals. Mr. Bagdis had allegedly boasted to IRS criminal investigators that he was going to write a new book called Federal Tax Fraud: The Users Guide. Mr. Bagdis may have a lot of time to work on his book—he faces 35 felony charges.

On Wednesday another individual was arrested allegedly because of this scheme. Wayne Bozeman, a West Chester, Pennsylvania attorney was charged with conspiracy to defraud the IRS and other related charges. The government alleges that Mr. Bozeman took money from a company he ran, deposited it into the account of another company he controlled, and then used the funds for personal expenses. The government alleges that Mr. Bozeman evaded $157,000 in tax on $830,000 of income.

Meanwhile, Mr. Bagdis and his alleged co-conspirators were also indicted on new charges yesterday. Mr. Bagdis is now alleged to have also prepared a false tax return for Mr. Bozeman.

Seven of the original ten co-conspirators have pleaded guilty and are cooperating with the government according to this story in the Philadelphia Daily News. Peter Scuderi, Mr. Bagdis' attorney, told the Daily News "My client's position is he's done nothing wrong. There's a defense to everything." Only time will tell what kind of an ending is written to Mr. Bagdis' book.

If you're in prison and need some extra money, what should you do? How about defrauding the IRS—after all, you're in prison, and all the government can do is keep you there.

Of course, such a scheme needs help from outsiders. It's tough when you're in prison to have access to your bank accounts. One such outsider will soon get to spend time at ClubFed from such a scheme.

Daniel Goodheart was a prison counselor at the Okeechobee Correctional Institute in Florida. Mr. Goodheart allegedly used a Florida Department of Corrections database to get names and social security numbers which he, and several others, used to obtain $902,000 in refunds.

But the IRS caught on to the scheme, and Mr. Goodheart was prosecuted on charges of mail fraud and wire fraud. He was found guilty in February, and was sentenced last week to five years at ClubFed. He will appeal the conviction.

Unfortunately, Mr. Goodheart isn't the only individual who has been engaging in this kind of tax fraud. Of all fraudulent returns caught by the IRS, 15% were prison-related. And that's just the fraudulent returns that were caught.