Not Legitimate Expenses

The New Jersey Supreme Court has disbarred an attorney for a federal tax conviction described by the Disciplinary Review Board

As [Long & Marmero’s]  managing partner, respondent exercised “primary control” of his firm’s finances, regularly reviewing its financial records with his firm’s bookkeeper and directing the preparation and filing of L&M’s partnership tax forms. Additionally, respondent utilized L&M’s attorney business account to pay his personal bills and expenses. In that vein, respondent would bring his personal bills to L&M’s bookkeeper to make the appropriate payments. Between 2012 and 2015, however, respondent directed L&M’s bookkeeper to falsely classify his personal expenses as legitimate business expenses in L&M’s “books and records.”

Specifically, at respondent’s direction, L&M’s bookkeeper falsely classified respondent’s student loan payments; personal debts; private school tuition for his children; day camp and music lessons for his children; and expenses for his principal residence and vacation home as seemingly legitimate firm expenses. Thereafter, respondent failed to report to the Internal Revenue Service (the IRS) those improperly classified “business expenses” as additional personal income. As a result of his scheme, in tax years 2012 through 2015, respondent failed to report to the IRS more than $800,000 in personal income, resulting in an aggregate $388,362 tax loss to the United States Government.

On April 21, 2020, the United States Attorney for the DNJ charged respondent with one count of federal income tax evasion for tax year 2014, in violation of 26 U.S.C. § 7201. Respondent waived indictment and, on April 21, 2020, entered a plea of guilty. As part of his plea agreement with the United States Attorney, respondent admitted that he had evaded personal income taxes for tax years 2012 through 2015, resulting in $855,420 in unreported personal income and a $388,362 tax loss to the government. Respondent also agreed to pay $269,736 in restitution to the IRS.

Respondent was serving as a Cumberland County freeholder at the time of the misconduct. (Mike Frisch)