A Dallas tax lawyer who “exploited his position as an attorney” and promoted illegal tax shelters for wealthy Texas clients for several years has been charged with 41 counts of tax and wire fraud.
And the federal indictment indicates charges may be brought against others involved in the fraud scheme.
Federal prosecutors in the Northern District of Texas announced Thursday that they arrested Joseph Garza of the Garza Legal Group with helping “mainly high-net-worth business owners use tax shelters to create a circular flow of funds to illegally reduce paying taxes.”
Tax attorney Joe Garza has been named in a 41-count indictment on charges of tax and wire fraud. (LinkedIn photo.)
The 14-page indictment, handed down by a federal grand jury Oct. 18 but kept under seal until Oct. 25, accuses Garza of advising “wealthy clients on how to shelter large amounts of otherwise taxable income through participation in an illegal tax shelter” and creating “a shell investment company that purported to serve as a family investment vehicle.”
“This attorney allegedly hid more than $1 billion of client income from the IRS, conning the U.S. Treasury out of roughly $200 million and lining his own pockets in the process,” said U.S. Attorney Chad Meacham. “Our country functions best when every citizen pays his or her fair share. We will aggressively pursue anyone who subverts our tax laws.”
A graduate of the Southern Methodist University Law School in 1969, Garza has practiced law in Dallas for five decades.
“Garza and others unlawfully and unjustly enriched themselves through fees and other compensation earned by promoting the shelter, preparing false tax returns and by providing advice and assistance to clients who participated in the shelter,” the indictment states.
Christopher J. Altemus Jr., an IRS special agent in charge of IRS criminal investigation at the Dallas field office, said Garza used his position as a lawyer and “purported tax expert to try and legitimize his illegal tax scheme.”
“His arrest should serve as a warning that individuals who create elaborate schemes that have no purpose other than to defraud the IRS and shift the tax burden to honest American taxpayers will be prosecuted,” Altemus said.
If convicted, Garza faces a maximum penalty of 20 years in prison for each of the 18 counts of wire fraud, 20 years in prison for conspiracy to commit wire fraud and three years in prison for each of 22 counts of aiding and assisting in the filing of false federal income tax returns.
At a first appearance hearing Wednesday, Garza pleaded not guilty. U.S. Magistrate Judge Irma Carrillo Ramirez released Garza with several severe restrictions, including a prohibition against contacting any of his clients or others involved in the tax schemes.
Garza was represented at the hearing by federal public defender Jason Hawkins.
Leading the prosecution for the government are assistant U.S. attorneys Renee Hunter, Katherine Miller and Marty Basu of the Northern District of Texas. In addition, trial attorney Robert Kemins of the Justice Department’s tax division is also involved.