San Diego 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 San Diego. Maybe the IRS sent a letter. Maybe federal agents showed up at your door. 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.

San Diego is two things that both make it uniquely dangerous for tax fraud. First, it's a border city - the busiest land border crossing in the Western Hemisphere sits just south in Tijuana. Cross-border business is everywhere. Second, it's the military capital of the West Coast. Naval Station San Diego. Camp Pendleton. Billions in defense contracts flowing through the region. The Southern District of California has developed DUAL expertise - border crime investigation AND defense contractor fraud. Plus California has the highest state income tax in the nation. When you face tax fraud prosecution in San Diego, you face maximum exposure. If you're facing similar issues in other cities, see our guides on Los Angeles tax fraud lawyers, Phoenix tax fraud lawyers, or El Paso tax fraud lawyers.

Most people think their industry provides protection. Defense contractors think military contracts are too classified to investigate. Cross-border businesses think international complexity confuses prosecutors. They're completely wrong. SDCA prosecutors have spent decades investigating exactly these industries. They understand defense contracting structures. They know how cross-border payments work. They've seen every scheme that military suppliers and international businesses use to hide income.

Military Capital Meets Border City

Heres the thing most people dont understand about tax fraud in San Diego. This isnt just another California city. Its the military capital of the West Coast AND a major border crossing point. Most cities have one defining characteristic that shapes there federal districts expertise. San Diego has two - and prosecutors here can pursue tax fraud in either arena with equal sophistication.

Think about what defense contracting income looks like. Government contracts with complex cost structures. Subcontracting arrangements. Cost-plus billing. Progress payments. The income structures in military contracting are extraordinarly complex - and prosecutors in San Diego understand them better then almost anywhere outside Washington DC. They've spent decades investigating defense fraud.

Now think about cross-border business income. Payments from Mexican operations. Maquiladora partnerships. Import/export transactions. Currency movements across the border. The complexity of international transactions creates opportunities for fraud - and prosecutors in San Diego have investigated these schemes since the border was established. They know how money moves between the US and Mexico. They know were cash disappears.

The Southern District of California dosent specialize in one industry. They specialize in both. SDCA prosecutors can pursue a defense contractor for billing fraud with the same expertise they use to pursue a cross-border business for unreported international income. Whatever industry your in, there already experienced in your exact situation.

Dual Prosecution Reality: Federal AND California

California has the highest state income tax in the nation - 13.3% at the top bracket. That creates something most people dont understand until its too late: maximum dual prosecution exposure. Federal prosecutors AND California prosecutors. Both interested in your case. Both investigating. Both potentially charging you with crimes.

When you evade taxes in San Diego, you face the most aggressive dual prosecution environment in the country. The IRS investigates federal tax evasion while the California Franchise Tax Board investigates state tax evasion. And the FTB is not passive. California is one of the most aggressive states for tax enforcement. They coordinate with federal investigators. They share information. They pursue criminal charges independently. Your exposure doesnt just double - it compounds.

Heres were the math gets scary. Federal tax evasion carries up to 5 years per count. California tax evasion under Revenue and Taxation Code 19706 carries additional years. The sentences can run consecutively. And both jurisdictions can pursue charges independently - double jeopardy dosent protect you because there seperate sovereigns. One investigation, two prosecutions, combined sentences.

And in San Diego, federal and state investigators have years of experience working together. The coordination is seamless. The information sharing is automatic. When your defense contract or cross-border business attracts federal attention, state investigators already know about it. The FTB doesnt wait for the feds to finish - they run there own investigation in parallel.

Southern District of California: Defense and Border Specialists

Most people only think about the IRS when they think about tax fraud prosecution. Thats a mistake that destroys lives. The Southern District of California handles federal prosecution across San Diego and Imperial counties. San Diego is headquarters. The resources concentrated here are substantial - and there specifically focused on the defense and border crimes that the region produces.

SDCA prosecutors have experience with every type of defense contractor tax fraud. Military suppliers who overbilled contracts while underreporting income. Subcontractors who hid cost overruns. Government vendors who created phantom expenses. Defense industry executives who failed to report stock options. This district may not have the volume of Pentagon cases DC sees, but they have deep expertise in military industry financial crimes.

And heres the border angle. SDCA prosecutors have spent decades investigating cross-border financial fraud. Businesses that hid Mexican income. Companies that manipulated transfer pricing. Individuals who failed to report foreign accounts. Import/export operations that structured transactions to avoid reporting. The border expertise here rivals any district in the country.

The FBI's San Diego field office coordinates closely with IRS Criminal Investigation. They share resources. They share intelligence. They build cases together. And becuase California has aggressive state tax prosecution, state investigators join the federal team. The combined resources focused on your case are overwhelming.

And heres the part most people miss. SDCA selects cases carefully. They cant prosecute everyone. So they focus on cases there certain to win - and cases that involve defense or border elements that justify federal resources. If your reading this because federal agents contacted you about your military contract or cross-border operations, your case has already been evaluated.

When Your Civil Audit Becomes Criminal

An IRS audit seems like a tax problem, not a criminal one. Your dealing with a Revenue Agent, 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 you to Criminal Investigation 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 criminal investigators and never tell you it happened. The referral happens through Form 2797. Your never notified when this form is filed. There no letter, no phone call, no warning. The civil audit continues like nothing changed, but in the background, a Special Agent has been assigned to your case and evidence gathering begins.

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 about your defense contract billing? Evidence. The detailed explainations you gave about your Mexican operations? Admissions. The questions you answered honestly about your foreign accounts? 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 defense contracting partner can be subpeonaed. Your Mexican business contacts can be compelled through treaty requests. Everyone you talked to about your finances becomes a potential witness for the prosecution.

And in San Diego, this audit-to-criminal pipeline includes both federal AND state coordination. A federal audit that reveals state tax issues brings the FTB into the mix. An audit showing unreported defense income or cross-border payments triggers both federal and state criminal exposure. What starts as a single audit can become a coordinated federal-state criminal investigation with overwhelming resources.

Federal and State Tax Fraud Penalties

Federal tax evasion under 26 USC 7201 carries up to 5 years in prison per count. Thats the starting point. But in California, state penalties stack on top - and California takes tax fraud seriously. You face dual exposure that creates maximum combined sentence potential.

But heres were it gets devastating in San Diego. If your tax fraud involves defense or border elements, additional federal charges often stack on top. Defense contractor fraud: up to 10 years per count. Wire fraud for electronic transactions: 20 years per count. Money laundering for cross-border currency movements: 20 years per count. FBAR violations for unreported foreign accounts: criminal penalties. The exposure compounds when industry-specific transactions are involved.

OK so heres were the math gets terrifying. Federal tax evasion: 5 years per count. California tax evasion: additional years. Defense fraud: 10 years per count. Wire fraud: 20 years per count. Money laundering: 20 years per count. Sentences can run consecutively. Add multiple counts across multiple statutes and both sovereigns, and your looking at combined exposure that can exceed decades. And federal sentences are served at 85% minimum - no early release for good behavior.

Fines for federal tax evasion can reach $100,000 for individuals and $500,000 for corporations. California adds more. Plus restitution - every dollar you allegedly evaded, with interest and penalties. Plus forfeiture of property involved in or derived from the crime. Your defense contracts. Your cross-border business. Your real estate. The financial destruction can be total.

Signs Your Already a Criminal Target in San Diego

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 defense contracts, traced your cross-border payments, and concluded that you probly commited a crime.

In San Diego, watch for industry-specific warning signs. Questions about your military contracts that seem unusualy detailed. Requests for cross-border payment records going back multiple years. Inquiries about Mexican bank accounts or business relationships. DCIS agents (Defense Criminal Investigative Service) asking about cost structures. HSI agents investigating currency movements. The IRS has become sophistcated about both defense contracting and cross-border business - they know what to look for and how to find it.

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 investigators without counsel is a minute your making your situation worse.

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. Subpoenaing your contract records. Interviewing your employees. Talking to your Mexican business partners. Requesting defense billing documents. Seizing financial records. Freezing accounts. 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 in San Diego, both federal and state investigators may be moving simultaneously. IRS-CI interviewing your accountant while FTB agents talk to your billing department. FBI pulling defense records while state investigators review your cross-border transactions. The coordinated investigation means multiple fronts of activity, multiple sources of pressure, multiple paths to evidence against you.

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 business lawyer. Someone who handles federal tax crimes exclusivly. Someone who understands IRS-CI, the Southern District of California, and defense or cross-border investigations. Someone whos been in the trenches. This is the one window were intervention can change everything.

Why You Need a San Diego Tax Fraud Lawyer NOW

Your reading this because something happened. An agent visit. A letter from the IRS. 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, Southern District of California prosecutors, and defense and cross-border fraud investigations. We understand the unique threat your facing in San Diego - where maximum dual prosecution exposure combines with industry expertise that understands your income structure. 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 defense contractors and cross-border businesses who thought they could handle it themselves and ended up facing charges that could have been prevented.

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 subpoenaing records. There coordinating with state investigators. The question is wheather you'll have representation when they make there move - or wheather you'll be one more conviction in there statistics.

We've been doing this for years. We know how IRS-CI builds cases. We know how Southern District prosecutors think. We know how defense and cross-border investigations work. 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 both federal and state investigators spend building there case against you. Make the call. Protect yourself. Protect your family. Protect your contracts. Because once the indictment comes down, protecting becomes much, much harder.

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