A Dallas tax attorney was arrested last Tuesday on charges relating to hiding money from the IRS, authorities said.
The charges against Joseph Garza, 79, revealed to the public on Thursday, included 18 counts of wire fraud, one count of conspiracy to commit wire fraud, and 22 counts of aiding and assisting in the preparation of fraudulent income tax returns. In total, it is reported that he shielded around $1 billion of his client’s money, resulting in a loss of $200 million in taxes to the IRS.
According to the Garza Legal Group website, the firm has over 40 years of experience in protecting assets and tax-exempt financing. Joseph Garza services over 2,000 clients in the U.S and internationally.
Allegedly, Garza filed fraudulent tax returns for his clients that would feature fake business write-offs and other methods to skirt around tax collection. Prosecutors also claimed that Garza set up shell companies with no purpose, keeping “a circular flow of funds,” from which he would take a cut as his payment for the illegal service.
Garza and others allegedly “assisted clients in the preparation and filing of fraudulent tax returns,” “falsely deducting businesses expenses for services that were never performed,” “falsely reporting gross receipts for payments that were not earned,” “falsely deducting payments from the investment company to the taxpayer for annuities that didn’t exist,” and “underreporting the individual taxpayers’ incomes,” according to the Justice Department press release.
Garza faces a maximum penalty of 20 years in prison for each count of fraud as well as three years in prison for each count of filing a false tax return. If found guilty, he could face up to 86 years in prison.
“[Garza’s] 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,” stated Christopher J. Altemus, Jr., special agent in charge of the IRS’s Criminal Investigation Dallas Field Office.
“Our country functions best when every citizen pays his or her fair share. We will aggressively pursue anyone who subverts our tax laws,” said U.S. Attorney Chad Meacham.
At his first court appearance on Wednesday, Garza pleaded not guilty. Records show that Garza was released after entering his plea, according to the Dallas Observer.