Don't Mess With Taxes

Alcatraz Island's federal penitentiary once housed the most infamous tax evader, Al Capone. This particular Big House is no longer used to house felons, but the U.S. legal system has plenty more facilities where it can send those convicted of tax crimes. (Photo by Chris6d - Own work, CC BY-SA 4.0)

Being a Big Law attorney has its benefits. Working for one of the most prestigious law firms in the United States, usually in one of the country’s major metropolises, means prestige and money.

But one such attorney apparently didn’t properly report his income to the Internal Revenue Service. And that could land him in the Big House for more than a year.

Eric E. Lenzen, a 44-year-old former corporate attorney at two major law firms, pleaded guilty this week to two misdemeanor counts of failure to pay his income taxes in 2016 and 2020.

In the plea agreement filed with U.S. District Court’s Eastern Division in Milwaukee, prosecutors say the defendant owed $171,031 on his 2016 tax year earnings of more than $1.16 million, but did not pay that amount by the April 15, 2017, due date.

Similarly, according to the court filing, the former lawyer made more than $2.24 million in 2020, but did not pay by April 15, 2021, the due tax of $868,499.

By failing to pay those taxes, and then adding accrued interest and penalties, federal officials say Lenzen’s final tax debt to the U.S. Treasury comes to more than $3.9 million.

"Throughout the relevant time period, the Defendant knew that he was required, by law, to pay these amounts to the IRS, but knowingly, intentionally, and willfully failed to do so," states the plea agreement.

The court document, signed in late March by Lenzen, along with his lawyer and two of Uncle Sam’s legal representatives, also notes that, "This information is provided for the purpose of setting forth a factual basis for the plea of guilty. It is not a full recitation of the defendant's knowledge of, or participation in, these offenses."

Lenzen, who was a partner in and working in the financial services and capital markets groups of Husch Blackwell in Milwaukee during the alleged tax evasion time frames, formally entered his guilty plea on May 20.

He left that firm in January 2022 to help launch rival Dykema Gossett’s Milwaukee branch. At the time of his move, Husch Blackwell told Reuters that Lenzen had been placed on leave in May 2021 "to address his financial, tax, and personal problems."

Lenzen’s  sentencing is scheduled for Sept. 17. Federal prosecutors recommend, again per the plea agreement, that the former Big Law attorney serve up to 16 months in federal prison, and pay more than $3.9 million in restitution.

Tax Felon Friday: I’ll update this post when Lenzen is officially sentenced in September. In the meantime, if you want to catch up on all sorts of tax miscreants, the ol' blogs' special Tax Felon Friday page is a good place to start.

And if you want more tax crime posts, notably those that were published long before I gave them a special end-of-week feature, you can peruse, what else, the tax crimes category. You'll find this post at the top of that collection right now, so just scroll down for more.

You also might find these items of interest:

• Non-filing millionaires are latest IRS targets
• AI start-up gets $12.5M to upgrade, expand tax evasion tracking technology
• RI man gets 8-year prison term for decade-long Ponzi scheme and tax evasion
• MLB superstar Ohtani’s former translator agrees to bank and tax fraud guilty plea deal

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