Pine Plains man admits $2 million tax fraud
A Dutchess County man who was a senior partner at a major international law firm admitted to underreporting his income by more than $2 million during a four-year stretch and now faces up to 12 years in prison, authorities said.
Theodore L. Freedman, 65, of Pine Plains, admitted to four counts of tax fraud Tuesday in U.S. District Court in Manhattan, U.S. Attorney Preet Bharara said.
Freedman faces up to 3 years on each of the fraud counts when he is sentenced Sept. 17 by U.S. District Judge Deborah A. Batts. As part of his plea deal, he also must pay restitution of more than $671,000 to the IRS and $169,000 to New York State, officials said.
As a senior partner in the law firm, Freedman was paid a percentage of the firm's partnership income for the year. For the years 2001-04, that added up to $5,388,699, officials said.
Freedman did his own taxes those years, and rather than reporting his true income for that period, he falsely underreported his pay by a total of $2,097,211, officials said.
Freedman was indicted in 2011. The government alleged that in addition to underreporting his income as the law firm's senior partner, he concocted a fictitious separate solo practice and claimed false losses totaling $542,358 during the four-year period.
In a statement, Bharara said: "Two things are certain: Freedman will now have to pay his taxes and more; and Freedman is now an admitted felon who has sacrificed his reputation, career, and potentially his liberty, for a few dollars. Others should not make the same bad calculation."
U.S. Attorney Jonathan Cohen prosecuted. A call to Freedman's attorney, Paul Schechtman of Manhattan, was not immediately returned Wednesday.