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Federal tax fraud leads to jail, restitution for Wisconsin man

Although it's easy to feel jaded when it comes to achieving the American dream, it's still possible to build one's own success from the ground up. Whether you immigrated to the United States or were born here, everyone deserves to profit from hard work, talent and a willingness to persevere.

For many people, achieving the American dream means starting a business and making it profitable. That was the hope for a man who came from Mexico more than 20 years ago and eventually launched multiple enterprises. Unfortunately his success story ended this month with a 10-month jail sentence and an order to pay more than $100,000 in restitution after he was convicted on federal charges of tax fraud.

The man owned a concrete company and did his own bookkeeping, which is what led to his legal troubles. Although he reported $450,000 in gross income for the years 2006 and 2007, bank deposits for the company totaled about $800,000. He told auditors that the business didn't make a profit, but admitted to having two Social Security numbers. He also later confessed that both he and his girlfriend claimed head-of-household status on their income tax returns.

The man also ran a business that prepared tax returns and immigration documents but declared income from that venture on his brother's tax return. He began preparing the forms back in 2004, but somewhere along the way the business transformed from a noble way to help fellow immigrants to a complicated tax scheme. His attorney requested a sentence of probation, but the man instead was sentenced to jail time and restitution. The defendant has already taken out a second mortgage on his house to cover the $137,416, as well as back taxes, penalties and some interest.

It's not uncommon for new business owners to make mistakes in their pursuit of success, particularly when it comes to the management of their finances. Many owners don't even know that they've committed fraud or another so-called "white collar crime" until it's too late. If you fear that you may have broken the law, one of your best lines of defense is to seek out an attorney before you're nabbed by authorities. An attorney with experience in white collar crimes -- including at the federal level -- can examine your case and determine what penalties you might face if you're at risk of a conviction.

Source: GazetteXtra.com, "Restitution, jail ordered in tax case," Kevin Murphy, Nov. 14, 2012

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