BIRMINGHAM, Mich. – A tax attorney from Oakland County was hired by a business owner to help her settle an IRS investigation, but he convinced her she owed $6.5 million more than she actually did so he could put that money in his own Swiss bank account, federal officials said.
UPDATE: Jury finds Freeman not guilty on all counts
Business owner hires Birmingham attorney
Jeffrey Freeman, a lawyer in Birmingham, was contacted in 2012 by a Canadian woman who had previously owned a cosmetics business in Las Vegas, according to an indictment filed Thursday (July 7).
Court records show the woman had owned the Las Vegas business from 2000-2002, and she later learned that during that time she racked up significant tax debt.
In 2012, she found out that the IRS was investigating her tax situation, so she hired Freeman to help her resolve the issue, according to authorities.
In November 2012, the woman wired about $15 million to an attorney trust account Freeman had opened at Citizens Bank in Bloomfield Hills, court records say. Freeman was instructed to use that money to resolve the IRS issue, officials said.
Authorities said Freeman paid the IRS about $8,409,301, which is what the woman owed for the tax years 2000-2002. That payment didn’t resolve penalties and interest sought by the IRS, court records show.
Money transferred to Swiss bank account
In February 2013, the IRS deemed the penalties and interest on the woman’s tax debt “uncollectable,” the indictment says. That amount totaled about $3.4 million, officials said.
“Eventually, the IRS wrote off penalties and interest altogether on (her) tax debt,” court documents say.
Freeman learned by May 2013 that the IRS had deemed the woman’s penalties and interest uncollectable, authorities said.
Around May 2013, he wired $2 million of the woman’s funds from his trust account at Citizens Bank to a bank account in the name of Rozet Assets at HypoSwiss Private Bank in Switzerland, according to court records.
Around October 2013, Freeman wired an additional $4.5 million of the woman’s funds to that same Swiss bank account, officials said.
What Freeman told his client
In August 2013, Freeman told the woman that he had resolved the outstanding penalties and interest on her account for $6.5 million, even though those fees had been waived, according to authorities.
In other words, he told her the money he moved into his Swiss bank account had been used to finally settle the IRS investigation to explain the disappearance of those funds, officials said.
She didn’t realize what had happened until 2019, when her bank asked for documents from the IRS transactions, officials said. That’s when she saw records of the actual payments and filed a lawsuit against Freeman, court records show.
After several extensions, Freeman filed a 1040 U.S. joint tax return for the year 2013 on May 7, 2015, according to the indictment. On that return, he didn’t report any of the $6.5 million he had embezzled from his client, according to authorities.
By underreporting that income, Freeman avoided paying about $2,781,882 in taxes, officials said.
The indictment says Freeman “willfully attempted to evade and defeat income tax due and owning by him and his spouse to the United States of America, for the calendar year 2013.”
He’s accused of reporting a figure that understated he and his wife’s taxable income by about $6.5 million.
As a result, the indictment accuses him of tax evasion.