Federal Law

Texas Lawyer On Trial for Federal Tax Evasion involving Millions of Dollars and Shelf Companies. No Doubt A lot of Other Texas Lawyers Will Be Watching and Worrying

The indictment alleges that Pursley received more than $4.8 million and an ownership interest in the co-conspirator’s ongoing business for his role in the fraudulent scheme. 

LIT COMMENTARY

Breaking News; Santa Claus Could Not Save Jack; Nine men and three women found Houston attorney Jack Stephen Pursley guilty of three counts of tax evasion and one count of conspiracy to defraud the United States late Friday. He faces up to 20 years in prison . . .sentencing reset for July 27, 2020 by Judge Lynn Hughes.

hughes resetting sentencing date to july 2020

United States v. Pursley (4:18-cr-00575)

District Court, S.D. Texas, Judge Lynn N. Hughes Presiding.

Houston Attorney Steve Pursley Charged in Offshore Tax Evasion Scheme

Allegedly Conspired to Repatriate More Than $18 Million in Untaxed Money Held in Foreign Bank Accounts

A federal grand jury sitting in Houston, Texas returned an indictment today charging a Houston attorney with one count of conspiracy to defraud the United States and three counts of tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division and U.S. Attorney Ryan K. Patrick for the Southern District of Texas.

According to the indictment, Jack Stephen Pursley, also known as Steve Pursley, conspired with another individual to repatriate more than $18 million in untaxed earnings from the co-conspirator’s business bank account located in the Isle of Man.  Knowing that his co-conspirator had never paid taxes on these funds, Pursley allegedly designed and implemented a scheme whereby the untaxed funds were made to appear to be stock purchases in United States corporations owned and controlled by Pursley and his co-conspirator.

The indictment alleges that Pursley received more than $4.8 million and an ownership interest in the co-conspirator’s ongoing business for his role in the fraudulent scheme.  The indictment further alleges that for tax years 2009 and 2010 Pursley evaded the assessment of and failed to pay the incomes taxes due on this money by, amongst other means, withdrawing the funds as purported non-taxable loans or returns of capital.  Pursley allegedly used the money he received to purchase personal assets, including a vacation home in Vail, Colorado and property in Houston.

If convicted, Pursley faces a statutory maximum sentence of five years in prison for the conspiracy count, and five years in prison for each count of tax evasion.  He also faces a period of supervised release, monetary penalties, and restitution.

An indictment merely alleges that a crime has been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Patrick commended special agents of IRS-Criminal Investigation, who investigated the case, and Senior Litigation Counsel Nanette Davis, Trial Attorney Grace Albinson, and Trial Attorney Sean Beaty of the Tax Division, who are prosecuting this case.

stevepursley

Jack Stephen (“Steve”) Pursley is a Houston-based attorney practicing trial law in Texas courts and licensed by the Texas Supreme Court. His firm, Pursley Law, practices business litigation in Texas.

Along with earning his law degree from the University of Tulsa College of Law, he also earned a Masters Degree in Dispute Resolution from Pepperdine University’s Straus Institute. In 2007, he was included in the Marquis Who’s Who in America.

Mr. Pursley has extensive experience in real estate. Before becoming a lawyer, he worked as a real estate appraiser and was the co-founder of a real estate appraisal and consulting firm.

Steve lives with his wife and two children in the Houston area. He enjoys coaching youth football, basketball, and baseball, teaching Sunday school, and volunteering at local charitable organizations.

The Pursley Law Firm, Pllc

jerry-england-sq

Meet Jerry England, The Expert Witness and Santa Claus

Our relationships with clients extend beyond financial recordkeeping and reporting. We understand the dynamics that affect their personal and professional lives. We listen to their goals and dreams. We work collaboratively to develop plans that transform ambitions into reality.

Jerry is the Principal and Founder of the firm. He has served a host of individuals and small business owners in his 30+ years as an independent Certified Public Accountant. He is an active member of the AICPA and the Texas Society of Certified Public Accountants.

Jerry is the Principal and Founder of the firm. He has served a host of individuals and small business owners in his 30+ years as an independent Certified Public Accountant. He is an active member of the AICPA and the Texas Society of Certified Public Accountants.

In addition to running his accounting practice:

He is the Treasurer of Land of My Grandfathers, Inc., a not-for-profit organization that operates the retreat camp in North Zulch, Texas (between Bryan and Madisonville).

He is a Team Captain and Committeeman in the Houston Livestock Show & Rodeo, Souvenir Program Committee.

He the Treasurer of the Houston Council on Recovery, and has recently served as Chairman of the Foundation Board.

Jerry has been the Chair of the Healthcare Committee for the Houston Chapter of CPA’s; and served on the Facilities Committee of the West Houston Community Center.

Lastly, his passion is his portrayal of Santa Claus and he is a member of the Lone Star Santas, Inc.

The federal tax evasion trial of Houston lawyer Jack Stephen Pursley begins Tuesday, September 3, 2019. It’s a case involving millions of dollars, shelf companies in the Isle of Man, a Brazilian who may have owned all of it or none of it and a falling out between two college friends.

Texas Lawyer Charged with Tax Evasion After Hiding $18 Million from IRS in Foreign Bank Accounts

David Klasing, September 28, 2018

On Thursday, September 20, 2018, the U.S. Attorney in Texas’ Southern District Court unveiled an indictment charging defendant Jack Stephen “Steve” Pursley, a Houston-based personal injury lawyer, with three counts of tax evasion and one count of conspiracy against the United States.

While tax crime statistics show that hundreds of people are tried for tax fraud every year, this particular case is notable for the scope of the alleged scheme, which involved the deliberate concealment of more than $18 million in offshore bank accounts.

If convicted, not only will Pursley risk prison time – in addition, he is all but certain to face financial penalties of a devastating magnitude, including restitution to the IRS.

Our criminal tax defense lawyers explain how Pursley violated the law, potential consequences of his actions, and perhaps most critically, what to do should you find yourself in a similar tax situation.

The following video explains the exposure surrounding undisclosed foreign bank accounts coupled with unreported offshore income.

 

Conspiracy to Conceal $18 Million Overseas Leads to Tax Evasion Charges for Houston Lawyer

The indictment revealed on September 20 recreates an elaborate chain of actions undertaken by Pursley and his co-conspirator for the purpose of concealing wealth and avoiding tax liabilities – violating, of course, several laws in the process.

To quote the indictment, “It was the purpose and object of the conspiracy… to unjustly enrich Pursley and Co-Conspirator 1 by evading the assessment and payment of federal income taxes to the IRS, namely, taxes due on more than $18 million in income… parked offshore in the Isle of Man,” a small island nation located in the Irish Sea.

Incidentally, the Isle of Man happens to be a well-known tax haven, making it an attractive destination for both individuals and business entities from a tax and financial standpoint.

However, while tax havens like the Isle of Man are perhaps more likely to attract U.S. taxpayers, they are not the only countries where U.S. citizens’ funds are subject to foreign income reporting laws.

On the contrary, citizens must report and pay taxes on offshore income no matter where overseas it is stored – and thanks to a law known as FATCA, which our international tax attorneys will discuss in just a few moments, American customers should not count on foreign banks to protect their information from the U.S. government, either.

According to a press release from the Department of Justice (DOJ), the scheme unfurled when Pursley and his co-conspirator took steps to repatriate the funds from the Isle of Man, where they were being stored in the co-conspirator’s business account, back into the United States.

Pursley – who was aware that the money and associated account had never been disclosed to the Internal Revenue Service – devised a scam in which “the untaxed funds were made to appear to be stock purchases in United States corporations owned and controlled by Pursley and his co-conspirator.”

For his assistance in planning and executing this scam, Pursley was rewarded with “more than $4.8 million and an ownership interest in the co-conspirator’s” company.

By furthering the scheme, the indictment alleges, Pursley “did knowingly and willfully conspire… to defraud the United States by impeding, [and] impairing… the lawful… functions of the Internal Revenue Service” (i.e. administration and collection of taxes).

This type of conspiracy – that is, a conspiracy-oriented toward “impeding and impairing” governmental duties – is known as a “Klein conspiracy.” Because proving a Klein conspiracy is often simpler and more pragmatic for the government than proving tax fraud, Klein conspiracies are frequently alleged by prosecutors in criminal tax cases.

However, as you may recall from the beginning of this article, conspiracy was only one of the charges against Pursley. Most of the charges against the defendant involved the alleged commission of tax evasion, which is banned under 26 U.S. Code § 7201 (attempt to evade or defeat tax).

How did Pursley violate federal tax laws?

Worldwide Income Reporting Requirements: FBAR, Form 8938, Form 1040

The answer has to do with the law we mentioned earlier, FATCA: an acronym which stands for the “Foreign Account Tax Compliance Act.” The United States requires all U.S. persons to report their offshore income, regardless of where the person (or company) physically resides. That means a Texas resident storing funds on the Isle of Man – or anywhere else outside the U.S. – would need to report the foreign income to the IRS.

This is accomplished by timely and electronically filing a tax form known as FinCEN Form 114 or the “FBAR” (Foreign Bank Account Report). In addition, taxpayers need to indicate worldwide income on their federal tax returns at Line 21, which asks about “Other Income.” Some of the same taxpayers may also need to file Form 8938 (Statement of Specified Foreign Financial Assets), a requirement under FATCA – which creates stiff penalties for banks that conceal information about U.S. customers from the IRS.

Due to these penalties, foreign banking institutions are likely to turn over account information to the IRS. That means U.S. customers should proactively explore ways of coming forward – before the bank beats them to it. If, for instance, you have received a FATCA letter from your bank, you should speak with an experienced FBAR lawyer immediately about your safest disclosure options.

Failure to file an FBAR, file Form 8938, and/or disclose foreign income on other tax forms can lead to immense penalties, with potential for criminal prosecution if the failure to report was willful. That being said, not all international taxpayers will be subject to these reporting requirements, as the aggregate funds must currently meet or have previously met specific monetary thresholds, namely $10,000 or $50,000, to be deemed reportable. Other exceptions may also apply, depending on the circumstances.

Pursley faces a sentence of up to five years in prison for each count of tax evasion, and up to five years in prison for the count of conspiracy. He may also be ordered to complete a period of supervised release and pay assorted fines and restitution.

Owen’s Easter Basket of Omissions and Whiteouts re Ocwen Loan Servicing et al.

The Burkes filed their Petition for Rehearing en banc to allow all the active judges who are not recused and able to participate, an opportunity to cast their Vote.

Protected: Owen’s Easter Basket of Omissions and Whiteouts re Hopkins Law et al

A party who files timely written objections to a magistrate judge’s report and recommendation is entitled to a de novo review of those findings or recommendations to which the party specifically objects. 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(2)-(3).

The Judicial Easter Egg Hunt: Owen’s Easter Basket and the Perversion of Justice.

We’re not privy to which Quarter Back clerk was assigned to draft the consolidated opinion but we can say emphatically it is villainous by design.

Austin Estate Planning & Tax Law Firm Accused by the IRS of Aiding and Abetting Clients Illegally Evade Paying U.S. Taxes.

Texas Lawyer On Trial for Federal Tax Evasion involving Millions of Dollars and Shelf Companies. No Doubt A lot of Other Texas Lawyers Will Be Watching and Worrying
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