Los Angeles Tax Fraud Lawyers

Welcome to Spodek Law Group. Our mission is simple: we believe everyone deserves a fighting chance when the government comes after them. If you're reading this, something happened that made you search for tax fraud lawyers in Los Angeles. Maybe the IRS sent a letter. Maybe federal agents showed up at your business. Maybe your accountant called with news that made your stomach drop. Whatever brought you here, you need to understand something most people don't realize until it's too late.

Tax fraud in Los Angeles isn't like tax fraud anywhere else in America. You're not dealing with one agency. You're being hunted by the largest federal court district in the country AND the most aggressive state tax agency in America - simultaneously. The Central District of California covers 18 million people. The California Franchise Tax Board has its own armed Criminal Investigation Bureau. Each has its own prosecutors, its own conviction metrics, and its own reasons to want your case. IRS Criminal Investigation has a 90% conviction rate - not because they're lucky, but because they only bring cases they're certain they'll win.

Most people think "double jeopardy" protects them from being prosecuted twice for the same conduct. It doesn't. Federal and state governments are separate sovereigns under the Constitution. They can prosecute you for the exact same tax fraud, on the same facts, without violating your rights. Federal tax evasion carries up to 5 years per count. California tax evasion adds up to another year PLUS fines up to $20,000. Combined with California's aggressive restitution requirements, you're looking at total exposure that can exceed 30 years and financial ruin that lasts a lifetime.

The Largest Federal District Wants Your Case

Heres the thing most people dont understand about tax fraud in LA. The Central District of California isnt just another federal court. Its the largest federal district in America. 18 million people. More cases then most countries entire court systems handle. CDCA prosecutes more white-collar crime then almost any other district in the country, and the prosecutors here build there careers on high-profile convictions.

Think about what that means for your case. Every assistant U.S. attorney in CDCA is looking for the next big win. The entertainment industry provides a steady stream of tax fraud cases - deferred compensation schemes, production tax credit fraud, unreported residuals, creative accounting that crosses the line. Silicon Beach brings tech founders with cryptocurrency complications and startup equity games. If your tax fraud touches Los Angeles, CDCA wants your case. Your not just a defendant. Your a career opportunity for ambitious prosecutors.

The FBI Los Angeles field office has a dedicated financial crimes squad. IRS Criminal Investigation maintains a major presence in LA. These agencies coordinate. They share information. They build cases together. When you become a target, your not facing one investigator - your facing a multi-agency task force with unlimited resources and unlimited patience. They can investigate for years before you ever know theres a problem.

And heres were it gets really interesting. CDCA handles cases from across Southern California - Los Angeles, Orange County, Riverside, San Bernardino, Ventura, Santa Barbara, San Luis Obispo. The geographic reach is massive. The investigative capability is enormous. And the prosecutors here have seen every scheme, every excuse, every attempt to hide income or inflate deductions. Nothing surprises them. Nothing impresses them. There only impressed by convictions.

California FTB: The Second Prosecution You Didnt See Coming

Most people only think about the IRS when they think about tax fraud prosecution. Thats a mistake that destroys lives. California has its own tax fraud prosecution machine - the Franchise Tax Board - and it operates completly independently of the federal government. The FTB has its own Criminal Investigation Bureau staffed with armed special agents who have full arrest power. They can investigate you, arrest you, and prosecute you under California law without any involvement from the feds.

Heres the part that makes this dangerous. California has the highest state income tax rate in America - 13.3% at the top bracket. That creates an enormous enforcement incentive. Every dollar of tax fraud costs California more then it costs almost any other state. The state is desperate to collect. The state is motivated to pursue. And the state has the resources to make your life miserable in ways the IRS cant.

California can prosecute you AFTER the federal government is done with you. Read that again. Under the dual sovereignty doctrine, federal conviction dosent protect you from state prosecution. You can plead guilty to federal tax evasion, serve your time, pay your restitution, and then California can charge you with state tax fraud on the exact same conduct. Seperate charges. Seperate trial. Seperate sentence. This isnt double jeopardy - its constitutional.

And California never stops. The state has a 20-year statute of limitations for tax debt collection, compared to the IRS's 10 years. Even if you survive both prosecutions, even if you serve all your time, California can keep coming after the money for another decade. Liens on your property. Garnishments from your wages. Bank account seizures. The state dosent forget. The state dosent forgive. And the state never, ever stops collecting.

When Your Civil Audit Becomes Criminal in California

A California FTB audit seems like a tax problem, not a criminal one. Your dealing with an auditor, answering questions, providing documents, trying to resolve the issue. Its stressful but it feels managable. Your cooperating. Your being helpful. Your doing everything there asking. But heres what nobody tells you - that auditor is trained to spot criminal indicators. And when they find them, they refer your case to the Criminal Investigation Bureau without telling you.

Let that sink in. The person your cooperating with, the person your trying to help, the person your providing documents to - that person can send your file to armed criminal investigators and never tell you it happened. The civil audit continues like nothing changed. But in the background, CIB special agents have been assigned to your case. Evidence gathering has begun. Witnesses are being contacted. Bank records are being subpeonaed. And you dont know any of it.

Everything you said during your "civil" audit - every explaination you gave trying to be helpful - is now being compiled into a criminal case against you. Your cooperation is building the prosecutions file:

• The helpful documents you provided? Evidence.
• The detailed explainations you gave? Admissions.
• The questions you answered honestly? Self-incrimination.

You were building the case against yourself and you didnt even know it.

Heres the part that makes defense lawyers cringe. You might think your accountant protects you. Theres no accountant-client privilege for tax matters. None. Your accountant can be compelled to testify against you. Your CPA can be subpeonaed. Your bookkeeper can be put on the witness stand. Everyone you talked to about your taxes becomes a potential witness for the prosecution. The person you hired to help you can become the governments star witness against you.

California Tax Fraud Penalties: How Bad Can It Get?

Federal tax evasion under 26 USC 7201 carries up to 5 years in prison per count. That sounds bad enough. But California tax fraud penalties stack on top of federal penalties, not instead of them. California Revenue and Taxation Code section 19706 makes willful tax evasion a felony punishable by up to one year in county jail or state prison. Section 19705 covers filing fraudulent returns with intent to evade. And the fines can reach $20,000 on top of everything else.

OK so heres were the math gets scary. Federal conviction: 5 years per count. California conviction: additional time. Sentences can run consecutively, not concurrently. You serve one sentence, then you serve the other. Add multiple counts on each side, and your looking at combined exposure that can exceed a decade. And thats before we even talk about restitution.

Restitution in tax fraud cases means paying back every dollar you allegedly evaded - with interest. California charges penalties on top of the principal. The IRS charges its own penalties and interest. Combined, the financial destruction can be total. Liens on your home. Seizure of bank accounts. Garnishment of future income. Even if you somehow avoid prison, the financial consequences can follow you for the rest of your life.

And dont think bankruptcy will save you. Tax debts are extremly difficult to discharge in bankruptcy. The governments collection rights survive Chapter 7, survive Chapter 13, survive virtually everything. Once you owe the IRS and California FTB, you owe them basicly forever. The only way out is to pay - or to fight the charges before conviction happens.

Signs Your Already a Criminal Target in LA

When federal agents contact you, the type of agent matters more then anything else. IRS Revenue Agent means civil audit - you still have time to prepare, options are still open, your not necesarily in criminal jeopardy. IRS Special Agent means criminal investigation - they've already decided your a target. If a Special Agent shows up at your door, the investigation has been running for months or years before you ever knew about it.

How do you know which type your dealing with? Special Agents carry badges and guns. Revenue Agents dont. Special Agents will introduce themselves as being from IRS Criminal Investigation. There not there to audit your return. There not there to help you resolve a tax problem. There there to gather evidence for a criminal prosecution. And by the time they show up, theyve already reviewed your returns, analyzed your bank records, interviewed witnesses, and concluded that you probably commited a crime.

The same applies to California FTB. If someone from the Criminal Investigation Bureau contacts you - not a regular auditor, but a CIB special agent - the criminal case is already being built. These arnt civil investigators. These are law enforcement officers with arrest power. There visit isnt the beginning of the investigation. Its near the end. There just collecting the final pieces before handing the case to prosecutors.

Your instinct will be to explain yourself. Clear things up. Show them your not a criminal. Answer there questions. Provide more documents. Cooperate fully. This is exactly what they want, and it destroys your defense. Anything you say without a lawyer present becomes evidence. Every word. Every document. Every helpful explaination. And investigators are trained to ask questions that elicit incriminating responses. They know what there doing. You dont.

The correct response is to politely decline to answer and call a tax fraud attorney immediatly. Not tomorrow. Not after you "get your documents together." Not after you talk to your accountant. Immediatly. Every minute you spend talking to a Special Agent without counsel is a minute your making your situation worse. Every word you say is another brick in the wall there building around you.

What Happens in the First 48 Hours

The moment you learn of a criminal tax investigation, a clock starts. You have 48 hours before critical options start closing. Agents are trained to extract statements fast - before you have time to think, before you can talk to a lawyer, before you understand whats happening. Every word you say without counsel is a mistake that cant be undone.

Heres what there doing while your panicking:

• Interviewing your employees
• Talking to your vendors
• Questioning family members
• Seizing documents
• Freezing bank accounts
• Issuing subpoenas
• Building there case

Your business is being dismantled while you try to figure out whats happening. By the time most people understand the severity, the damage is already done.

And heres the part most people dont think about. Your family members can be brought in for questioning. Your spouse can be subpeonaed. Your adult children can be interviewed. Anyone who might know anything about your finances can be compelled to talk. And what they say becomes evidence. Not just against you - potentialy against them too. Tax fraud investigations have a way of expanding to include everyone in orbit.

The only correct action in the first 48 hours: say nothing, sign nothing, call a tax fraud lawyer. Not a general attorney who dabbles in tax issues. Not your cousin who passed the bar. Someone who handles federal tax crimes exclusivly. Someone who understands IRS-CI, CDCA, and California FTB prosecution. Someone whos been in the trenches. This is the one window were intervention can change everything - were the right lawyer can sometimes prevent charges entirely.

Real LA Tax Fraud Cases That Destroyed Lives

Think tax preparers are to small to prosecute? A Marina del Rey tax preparer was sentenced to three and a half years in federal prison for a tax fraud scheme that caused more then $1.6 million in losses to the IRS and victims. Just a local tax prep business. Nothing glamorous. Nothing high-profile. But the feds prosecuted anyway, and the court imposed a significant sentence anyway. The size of your operation dosent protect you. The only thing prosecutors care about is wheather they can prove the case.

Maybe you think professional expertise protects you. Robert Blair Krueger Jr. was an attorney - someone who spent there entire career understanding the law. Charged with tax evasion and filing false tax returns. Professional knowledge didnt protect him. Understanding the system didnt save him. The system caught him anyway. And now his legal career is destroyed along with his freedom.

Look at the 2024 cases. Perez pleaded guilty in September 2024 to tax evasion and aiding false returns. Grimes pleaded guilty in October 2024 to tax evasion in CDCA. A $24 million California tax fraud scheme was prosecuted - massive state revenue losses, multiple defendants, years of investigation. These cases are happening right now. These prosecutions are ongoing. The people involved probably thought they would never be caught. They were wrong.

Heres what all these cases have in common. Everyone thought they were to smart or to small to prosecute. "They wont come after me." "I'm not a big enough fish." "My situation is different." "I know how this works." IRS-CI and FTB-CIB have resources you cant imagine. They have time you dont have. They have patience that exceeds your ability to hide. If your reading this because agents contacted you, your already on there radar. The question isnt wheather your going to be investigated. The question is what you do about it.

Why You Need an LA Tax Fraud Lawyer NOW

Your reading this because something happened. An agent visit. A letter. A subpoena. A phone call from your accountant that made your stomach drop. Right now, today, you have options you wont have next week. Pre-indictment intervention can sometimes prevent charges. Voluntary disclosure programs may still be available. Cooperation agreements can be structured. Plea negotiations can begin early. But that window closes fast.

Heres were the timing matters. Before indictment, your a "target" or a "subject" - categories that have some room for manuver. After indictment, your a defendant. The charging decision has been made. The grand jury has returned a true bill. Your facing trial. Everything changes. The leverage shifts. The options narrow. The cost skyrockets.

At Spodek Law Group, we handle federal tax fraud cases. Todd Spodek has defended clients against IRS-CI, CDCA prosecutors, and California FTB prosecution. We understand the dual threat your facing because we've seen what happens when people wait. We've seen clients who talked to agents without counsel and destroyed there own cases. We've seen business owners who thought they could handle it themselves and ended up in federal prison. We've seen what the system does to people who dont take it seriously.

The consultation is free. The cost of waiting isnt. Call 212-300-5196. The prosecutors arnt waiting for you to get organized. There building there case right now, today, while your reading this article. There interviewing witnesses. There reviewing documents. There preparing charges. The question is wheather you'll have representation when they make there move - or wheather you'll be one more conviction in there 90% rate.

We've been doing this for years. We know how IRS-CI builds cases. We know how CDCA prosecutors think. We know how California FTB pursues tax fraud charges. We know the judges, the courtrooms, the procedures. And we know what happens to people who try to navigate this system without experienced counsel. Some of them are in federal prison right now, serving sentences that could have been avoided or reduced if they had called a lawyer earlier.

The choice is yours. But the window is closing. Every day you wait is a day the government spends building there case against you. Make the call. Protect yourself. Protect your family. Protect your future. Because once the indictment comes down, protecting becomes much, much harder.