Anyknow know anything about Bernard Bagdis?

[Demosthenes]

Feds: Pa. tax activist helped clients evade millions in taxes
The Associated Press, 11/28/07 3:50 PM EST
UPDATED: 11/28/07 3:58 PM EST

An anti-tax activist hid millions in income for himself and clients through an elaborate web of shell companies, federal prosecutors charged Wednesday in an 11-defendant indictment.

Bernard Bagdis, 58, a lawyer and tax preparer, was arrested after a six-year investigation that netted two doctors, an engineer, several business executives and an older woman with a small cleaning service.

At one point, Bagdis agreed to help an undercover Internal Revenue Service agent hide $100,000 in cash so that it wouldn't be taxed, officials said.

"He boasted he would write a book and call it 'Federal Tax Fraud: The User's Guide,'" said U.S. Attorney Patrick Meehan at a news conference.

Bagdis runs a small law office in Blue Bell, a Philadelphia suburb, but has not filed an individual tax return since 1990, prosecutors said.

The 74-count indictment charges that he and his clients failed to pay $4.6 million in federal taxes on a combined $23 million in unreported income from 1996 to 2006.

At a hearing Wednesday afternoon, a judge set bail for Bagdis at $2 million and ordered him to surrender his passport and about 25 firearms he said he keeps at his Norristown home. He was also ordered to wear an electronic monitoring device. His office did not immediately return a phone message.

The others charged include two principals of the Basement Doctor Waterproofing Co., based in Pennsylvania. Bagdis came to own a 7 percent state in the business and control much of its finances, prosecutors said.

The co-defendants also include Dr. Bertram R. Russell, a radiologist based in Chester County who paid no federal taxes on nearly $3 million in income from 1998 to 2006, prosecutors said.

[LPC]

Bagdis runs a small law office in Blue Bell, a Philadelphia suburb, but has not filed an individual tax return since 1990, prosecutors said.

Never heard of him, and the Pennsylvania Disciplinary Board reports no history of discipline.

And there are a lot of farms between Philadelphia and Blue Bell, which is closer to Norristown than to Philadelphia, and not that easy to get to from Philadelphia, so I'm not sure it's accurate to call it a "suburb."

[Demosthenes]

Defendants in $4.6 million tax-evasion scheme
(AP)

A 74-count federal indictment filed Wednesday makes the following charges and allegations:

_ Bernard Bagdis, 58, of Norristown, with conspiracy, failing to file tax returns and other crimes for allegedly helping himself and clients cheat the government out of $4.6 million in taxes.

_ Dr. Bertram R. Russell, 56, of Gladwyne, a radiologist, with paying no federal taxes on nearly $3 million in income.

_ Dr. John P. Leichner, 64, of Newtown, a vascular surgeon, with evading $250,000 in taxes and using a sham company to his pay country club dues and private school tuition.

_ Richard J. Frase, 61, of Schoharie, N.Y., and Rochester Hills, Minn., a contract engineer for the Chrysler Corp., with hiding more than $1 million in income.

_ Kenneth W. Klinger, 57, of Perkiomenville, part-owner of Basement Doctor Waterproofing Company, with his wife failing to pay $393,000 on $1.3 million in income.

_ Stephen Schulz, 43, of Richboro, another Basement Doctor part-owner, with his wife failing to pay $250,000 on $920,000 in income.

_ Michael S. Klein, 36, of Warrington, a former lawyer in Bagdis' office, failing to pay $75,000 on $363,000 in income.

_ Kathleen Williams, 46, of Pottstown, Bagdis' former administrative assistant, failing to pay $61,000 on $293,000 in income.

_ Steven Hedrick, 47, of Dover, Del., who owned a debt collection service, with a spouse failing to pay $500,000 on more than $1.3 million in income.

_ William K. Acosta, 52, of Gilbertsville, a businessman, with hiding $685,000 in income to evade $167,000 in taxes.

_ Helen M. Gramaski, 68, of Ardmore, a cleaning company owner, with failing to pay $61,000 in taxes on $150,000 in income.

[Demosthenes]

Prosecutors said the IRS, FBI, federal prosecutors and U.S. Postal Service inspectors spent six years investigating Bagdis.

Six years? Good lord.

[Demosthenes]

He commonly (word du jour) goes by the names B. Jay Bagdis and Jay Bagdis.

http://www.gatewaymg.net/Exec_Bios.htm

http://64.233.169.104/search?q=cache:XQ ... cd=5&gl=us

[Dr. Caligari]

More on the story from the Legal Intelligencer, via Law.com:

Pa. Lawyer Indicted in Tax Fraud Case
Shannon P. Duffy
The Legal Intelligencer
November 29, 2007


A Montgomery County, Pa., lawyer allegedly concocted schemes to help eight clients and two of his employees hide more than $23 million in income and avoid paying more than $4.6 million in taxes, a federal grand jury charged in a 168-page indictment handed up Wednesday.

Attorney Bernard J. Bagdis, 58, who has an office in Blue Bell, Pa., was arrested Wednesday at his home in Norristown, Pa. The indictment accuses him of allegedly assisting his clients -- including two doctors, a lawyer and several small-business owners -- in funneling large portions of their income through shell corporations.

Also named in the indictment are eight of Bagdis' clients and two of his employees.

U.S. Attorney Patrick Meehan alleged in a news release that Bagdis "was so proud of his schemes that he boasted he would write a book and call it Federal Tax Fraud, The User's Guide."

The indictment alleged that Bagdis has not filed an individual federal tax return since at least 1990 and was captured on tape saying the government investigation of him would be "a fight to the death."

Bagdis was charged with one count of attempting to impede and obstruct the IRS, seven counts of conspiracy, 16 counts of aiding and assisting the preparation of a false tax return, six counts of failing to file individual income tax returns and five counts of failing to file currency transaction reports.

Also indicted were Bertram R. Russell, 56, a radiologist from Gladwyne, Pa.; John P. Leichner, 64, a vascular surgeon from Newtown, Pa.; attorney Michael S. Klein, 36, of Warrington, Pa., who previously worked for Bagdis; Kenneth W. Klinger, 57, of Perkiomenville, Pa.; and Stephen Schulz, 43, of Richboro, Pa., both part-owners of Basement Doctor Waterproofing Co.; Kathleen Williams, 46, of Pottstown, Pa., who worked for Bagdis as an administrative assistant; Steven Hedrick, 36, of Dover, Del., the owner of a debt collection service; William K. Acosta, 52, of Gilbertsville, Pa.; and Helen M. Gramaski, 68, the owner of a commercial cleaning business.

The indictment alleges that Bagdis assisted his clients and employees in creating "nominee entities," or shell corporations, to hide their income, and the source of that income, from the IRS.

By funneling money through bank accounts of those nominee entities, and by paying bills out of the nominee entities' bank accounts and the bank accounts of other corporations that Bagdis controlled, the indictment charges, Bagdis was hoping to make it impossible for the IRS to trace the funds back to his clients or their Social Security numbers.

Assistant U.S. Attorney John Pease said Bagdis faces at least 10 years in prison if convicted on all charges. The other 10 defendants face possible prison terms of one or two years, depending on the amount of taxes evaded, he said.

Bagdis' lawyer, Peter J. Scuderi, said he has not yet reviewed the entire indictment, but that he anticipates the case will go to trial and that Bagdis will be "vindicated because he's done nothing wrong."

According to the indictment, Bagdis allegedly made numerous statements that were captured on tape during an undercover operation.

Bagdis allegedly assisted the undercover agents in concealing more than $100,000 in cash that the agents told Bagdis they did not want the IRS to find, the indictment said.

In his conversations with agents, the indictment said, Bagdis allegedly described himself as an active member of the "anti-tax underground."

The indictment stated Bagdis allegedly told the agents that the best approach in dealing with the IRS was to "hide in plain sight" and to eliminate the reporting of compensation payments by third parties to the IRS.

Bagdis also allegedly explained to the undercover agents that "what you really want is an anonymous EIN [employer identification number], which is not traceable to you," the indictment stated.

The indictment alleges that Bagdis assisted Russell in creating a shell corporation, which he used to receive his earnings and pay his living expenses. Between 1998 and 2006, the indictment says, Russell earned more than $3 million, but allegedly reported no income, evading $900,000 in taxes.

Bagdis allegedly assisted Leichner, the indictment charges, in creating a corporation named Surging Skyward Inc. that Leichner used to maintain several cars and a plane, including a 1975 Piper airplane, a 2001 Lexus RX 300, a 1995 Mercedes Benz S420 and a 1982 Ferrari.

The indictment also alleges Bagdis assisted Leichner in establishing two trusts, which did not file tax returns and which he used to maintain a vacation home and several rental properties in North Carolina.

[VinnyZ]

Rochester Hills, Minn

Ok....someone doesn't apparently know that "MI" is Michigan and not Minnesota.

[Demosthenes]

You just gotta' love a tp idiot who brags about his crimes on tape.

Huge tax fraud is alleged

A Blue Bell lawyer, reportedly caught on tape boasting, is accused of aiding 10 people avoid $4.6 million in taxes.

By John Shiffman
Inquirer Staff Writer

In what federal authorities in Philadelphia called one of the largest tax scams in recent memory, a Blue Bell lawyer was charged yesterday with helping a radiologist, a vascular surgeon, a debt collector and seven others avoid $4.6 million in taxes.

Authorities described the alleged ringleader, lawyer Bernard Jay Bagdis, as a brash antitax proponent who used shell corporations, a fictitious foreign bank and a basement-waterproofing company to hide $23 million income from the IRS.

A few months after federal agents raided his Norristown home and Blue Bell law office in 2004 and seized documents, authorities said, Bagdis was taped by an informant boasting that the government was unlikely to prove its case.

The criminal investigation, he allegedly told an informant wearing a hidden IRS microphone, was "a fight to the death."

At one point, Bagdis also allegedly said: "I'm working on my new book. It's called Federal Tax Fraud, The User's Guide."

U.S. Attorney Patrick L. Meehan said: "Our response to that statement is a 168-page document called an indictment and its title is called U.S. v. Bernard Bagdis."

Bagdis, 58, was arrested at his Norristown home at dawn yesterday.

His lawyer, Peter J. Scuderi, said he had just begun to review the lengthy indictment and therefore could not comment on specifics. But, he said, "We intend to fight the charges and, hopefully, we will prevail."

Ten IRS and FBI agents and U.S. postal inspectors and four federal prosecutors spent six years investigating Bagdis. Authorities said that they used two undercover IRS agents and that Bagdis had helped one agent hide $101,000, taking 2 percent for his services.

"He took 1 percent of the money going in and 1 percent of the money going out," Assistant U.S. Attorney John J. Pease said.

In an August 2003 recorded conversation with an undercover agent, Bagdis allegedly said: "Everybody recognizes there's 50 million nonfilers."

Undercover agent: "No, I didn't know that."

Bagdis: "That's kept . . . very, very quiet."

Undercover agent: "I'd like to be [in] the 50 million . . . if I could get away with it."

Bagdis: "You can. Actually, you just have to organize your affairs appropriately."

A federal magistrate ordered Bagdis released on $2 million bond, provided that he surrender his 25 firearms and pilot's license, and wear an ankle bracelet that can track his movements electronically.

Bagdis is accused of helping 10 others avoid taxes - all of whom were charged yesterday:

Bertram R. Russell, 56, a radiologist from Gladwyne, is accused of creating a shell corporation with Bagdis, which he used to receive his earnings and pay his living expenses. From 1998 and 2006, the indictment said, Russell earned $3 million but reported no income to the IRS, dodging $900,000 in taxes.

John P. Leichner, 64, a vascular surgeon from Newtown, Bucks County, is accused of hiding $1.2 million in income and using some of that money to buy a single-engine plane and a Ferrari.

Richard J. Frase, 61, an engineer who lives in a Detroit suburb and works under contract for Chrysler Corp., allegedly worked with Bagdis to hide $1,048,078 in income, avoiding $326,060 in taxes.

Kenneth W. Klinger, 57, of Perkiomenville, is accused of hiding $1.3 million and avoiding $393,000 in taxes. Klinger is a part-owner of Basement Doctor Waterproofing Co., the company Bagdis allegedly advised on tax matters. In 2005, he wore a wire for the IRS against Bagdis and recorded what authorities said were incriminating statements, including the alleged one about the "tax fraud" book.

Stephen Schulz, 43, of Richboro, who was also a part-owner of Basement Doctor, is accused of hiding $927,081, avoiding taxes of $253,590.

Michael S. Klein, 36, a lawyer from Warrington who once worked with Bagdis, is accused of failing to report $363,425 in income, avoiding about $74,000 in taxes.

Kathleen Williams, 46, an administrative assistant from Pottstown who worked for Bagdis, is accused of hiding about $293,000 in income, avoiding about $61,000 in taxes.

Steven Hedrick, 36, of Dover, Del., who owned a debt-collection service, is accused of hiding $1.3 million to avoid paying $500,000 in taxes.

William K. Acosta, 52, a Gilbertsville businessman, is accused of working with Bagdis to avoid $167,000 worth of taxes by telling the IRS that IRA funds had been rolled over to an account at a Ireland bank that no longer exists.

Helen M. Gramaski, 68, of Ardmore, the owner of a commercial cleaning business, is accused of avoiding $60,000 in taxes with Bagdis' help.

If convicted of the fraud and tax charges, Bagdis faces at least 10 years in prison, according to the advisory sentencing guidelines, Pease said.

If convicted of lesser tax charges, Russell, Leichner, Frase, Klinger and Schultz probably face about two years in prison, while Klein, Williams, Hedrick, Acosta and Gramaski probably face about a year in prison.

[Doktor Avalanche]

You just gotta' love a tp idiot who brags about his crimes on tape.

The tape will get you every time.

[Demosthenes]

Six enter guilty pleas in alleged tax fraud

By John Shiffman
Inquirer Staff Writer

Six people pleaded guilty yesterday to federal charges related to an alleged $4.6 million tax fraud that the government says was orchestrated by a Blue Bell lawyer.

Those who pleaded guilty yesterday before U.S. District Judge J. Curtis Joyner were among 11 indicted last month. Prosecutors have described the case as the largest tax fraud in the region in recent memory.

The lead defendant, lawyer Bernard Jay Bagdis, is accused of creating shell corporations, a fictitious foreign bank, and a basement-waterproofing company to hide $23 million income from the IRS. The loss to taxpayers was $4.6 million, officials said.

Bagdis, 58, and four others have pleaded not guilty. Each is free on bail pending trial next year.

The six who pleaded guilty yesterday are cooperating with the IRS, FBI and Postal Service investigation. They are:

Kenneth W. Klinger, 57, of Perkiomenville, part-owner of Basement Doctor Waterproofing Co. He admitted working with Bagdis to avoid $393,000 in taxes.

Stephen Schulz, 43, of Richboro, also a part-owner of Basement Doctor, who avoided taxes of $253,590.

Michael S. Klein, 36, a Warrington lawyer, who avoided about $74,000 in taxes.

Kathleen Williams, 46, an administrative assistant from Pottstown who worked for Bagdis, and avoided $61,000 in taxes.

William K. Acosta, 52, a Gilbertsville businessman, who avoided $167,000 worth of taxes.

Helen M. Gramaski, 69, of Ardmore, the owner of a commercial cleaning business, who avoided $60,000 in taxes.

According to Assistant U.S. Attorney John Pease, the advisory federal sentencing guidelines in this case recommend 2- to 4-year sentences for Schulz and Klinger. The guideline range for the others is at least a year.

Steven Hedrick, 36, of Dover, Del., who owned a debt-collection service, and allegedly avoided $500,000 in taxes, is scheduled to plead guilty in January.