Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that LEWIS STAHL, the owner of a Manhattan medical technology company, pled guilty to tax evasion based on his failure to report over $21 million in business income to the IRS, and his evasion of over $6.3 million in income taxes. STAHL pled guilty before U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Lewis Stahl, the owner of a successful medical technology company, earned over $21 million in profit. However, despite amassing personal wealth in the tens of millions, Stahl grossly underreported his income to the IRS, reporting income as low as less than $10,000 for the 2011 tax year. Stahl has now pled guilty to tax evasion and faces serious time in federal prison. This case is a prime example that attempting to conceal earned income is far costlier than paying your fare share like honest taxpayers.”
According to the Information to which STAHL pled guilty, and statements made during the proceedings today:
Since at least in or about 2010, STAHL has owned and operated a medical technology company located in New York, New York (the “Medical Technology Company”), a limited liability company that develops and sells medical software applications. The Medical Technology Company holds itself out as a provider of “computer ready” and “fully mobile” applications, which allow physicians to prescribe medications and to order and view diagnostic information, lab results, and cardiology/radiology images.
Between in or about 2010 and in or about 2014, the Medical Technology Company earned over $32 million in gross income. These earnings resulted in over $21 million in business income to STAHL, which he accessed by using business bank accounts and business credit cards. STAHL used this money to fund the purchase of personal items for himself such as clothing, jewelry, watches, real estate rentals, country club benefits, and a firearms collection. Prior to 2015, despite earning this business income from the Medical Technology Company, STAHL failed to file individual tax returns reporting any of the income to the IRS. The Medical Technology Company, likewise, failed to file partnership or corporate tax returns reporting any of the income to the IRS.
In or around March of 2015, an IRS revenue agent (the “IRS Revenue Agent”) contacted STAHL regarding his failure to file for the tax years 2010 through 2014, and asked STAHL to address the situation by filing delinquent Form 1040s for those years (the “Delinquent Returns”). Shortly thereafter, STAHL retained a certified public accountant (the “Accountant”) to file the Delinquent Returns for STAHL. STAHL, however, falsely stated to his Accountant, in sum and substance, and in part, that he was a “W-2” employee only of the Medical Technology Company, that his W-2 income was his only income, and that he had no ownership interest in the Medical Technology Company. In truth and in fact, STAHL had an ownership interest in the Medical Technology Company, and had earned over $21 million in business income from the company, well beyond the income reported on his W-2s.
The Accountant subsequently filed the Delinquent Returns for STAHL, which, as a result of the lies that STAHL told the Accountant, were false and fraudulent. Specifically, the Delinquent Returns falsely claimed that STAHL’s total income was $38,652 in 2010; $7,115 in 2011; $84,615 in 2012; $100,000 in 2013; and $100,000 in 2014. The Delinquent Returns further falsely reported that STAHL did not receive any business income in any of these years, and failed to include a Schedule C detailing the significant amount of business income that STAHL earned from the Medical Technology Company. STAHL’s failure to report over $21 million in business income to the IRS – first by failing to file returns, and then by causing the false Delinquent Returns to be filed by the Accountant – resulted in a loss to the IRS of over $6.3 million in taxes due and owing.
STAHL, 62, of Florida, pled guilty to one count of attempt to evade or defeat tax, which carries a maximum sentence of five years in prison. STAHL has agreed to pay restitution to the IRS, representing the additional tax due and owing as a result of STAHL’s conduct, in the amount of at least $6,349,689. Sentencing before Judge Abrams is scheduled for January 25, 2019, at 2:30.
The statutory maximum sentence is prescribed by Congress and is provided here for information purposes only, as any sentence imposed on the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of IRS-CI in this case.
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