August 16, 2016
How the IRS took down Al Capone
Everyone has heard of notorious U.S. mobster Al Capone. But few may realize that it wasn’t his many crimes committed as a mob boss that landed him in federal prison – it was tax evasion.
For years, state and federal prosecutors tried to charge and convict Capone for various crimes – including murder, bootlegging and illegal gambling – without luck. That is when the government tried a different approach: They decided to go after Capone for tax evasion.
Tax evasion charges, a jury trial and a federal prison sentence
Capone was known as a big spender. He dealt exclusively in cash, had no bank accounts and never filed tax returns. However, through diligent investigation, IRS agents were able to track his income by evaluating gambling house ledgers, clothing and jewelry purchases, homes and other expenditures. The result of the investigation was the determination that Capone owed over $200,000 in back taxes. Federal prosecutors jumped on this opportunity to charge Capone with tax evasion.
On October 24, 1931, Al Capone was convicted of tax evasion by a jury and sentenced to 11 years in prison. Capone was also fined for his crime and his property was seized by the federal government. Capone served seven years of his sentence, spending several of those years in Alcatraz.
The IRS is a powerful federal agency
The IRS does more than audits. When the U.S. Attorney’s Office can’t get other criminal charges to “stick” it often works with the IRS to investigate and charge individuals with tax crimes, such as tax evasion and tax fraud.
Don’t make the same mistake as Al Capone
One of the biggest mistakes individuals – including Al Capone – make when facing criminal tax charges is to hire a criminal defense attorney with no experience handling criminal tax matters. In fact, if Capone had hired a criminal tax defense attorney, he would have known that the statute of limitations on the IRS’s claim had already expired. When facing tax evasion, tax fraud and other criminal tax charges, you need a lawyer who knows tax law.