Tuesday, November 27, 2012

Attorney Disabarred over saving himself $22,830 in Tuition

Reflect on three things and you will never come to sin: Know what is above you--a seeing eye, a hearing ear, and all your deeds recorded in a book.  (Pirkei Avot)

The Sun Times (via Forbes) is reporting an unbelievable story that defies all rational explanation.  The only rational explanation is mental illness.  An attorney was disbarred for "conduct involving dishonesty, fraud, deceit or misrepresentation" on November 19.  Mr. Golden had submitted false tax returns to his child's private school in 1999-2000 and 2002-2003 and in 2011 Illinois officials sought disbarrment.  The total benefit of the fraud was $22,830 over three years ($6,160, $7,884, $8,786 for school years 01-02, 02-03, and 03-04).  There is no IRS case, and the statue of limitations for the IRS has long passed, but that didn't prevent other examination of data.  He understated his income by over 90% for the sole purpose of evading tuition.  

No, thankfully Mr. Golden's children to not attend Yeshiva, rather some fancy prep school.  But this story is EXTREMELY compelling and should not be ignored.  Some take aways:

*One should NEVER submit a different tax return to a tuition committee or any other financial aid agency than is submitted to the IRS.   I have heard of people and accountants who would create one return for the IRS and another (more 'honest' return, term used loosely) for the yeshiva.  This story is proof that one shouldn't try to dance at two weddings.  With the speed of technology, I imagine there will be more synchronization making dancing at two weddings more difficult.

*Financial committees should do a little bit of homework.  By the time this man was applying for aid, he was not a Partner in a big law firm, but he misrepresented income by 90%.  In a world of cross-pollination between tuition committees, industry, and big firms, catching major misrepresentations of income should be something doable.  

*There is no statue of limitations when it comes to your sins being revealed.  I'm struck by the timeline in this story.  

Also a note from Forbes' blogger taxgirl:

But this issue is one that I receive emails about on a disturbingly regular basis though usually the target is financial aid for college and not private elementary school as is the case here. As the cost of education skyrockets, parents feel trapped to pay for school – and some of them consider lying in order to get financial aid. And yes, financial aid forms require that you submit supporting documentation, usually pay stubs or federal income tax returns. Here’s where folks get into trouble: they lie on their tax returns in order to skew the numbers for financial aid. Sometimes it’s overstating deductions (bad) or omitting income (really bad). Other times, it’s lying about dependents, exemptions and in some instances, marital status (really, really bad). In almost every instance, one lie leads to another because it’s hard to keep up. Just like with Golden.


Mark said...

I have heard of people and accounts who would create one return for the IRS and another (more 'honest' return, term used loosely) for the yeshiva.

I don't understand this sentence. I would think that the "more honest" one went to the IRS - who has the ability to verify many of the entries on it, and has men with guns (the "law") backing them, and the less honest one went to the school - who cannot verify most of the entries, and to cause them to lower his tuition.

Mr. Cohen said...

The school in this incident is not a Yeshivah, but people will still identify "Golden" as a Jewish name; the result: Chillul HaShem.

How disappointing that a lawyer has so little respect for the law.

Orthonomics said...

Mark, it is strange, but I have heard this (people develop a conscious for the Yeshiva, but not for the law) and I have heard the opposite.

JS said...

Attorneys and other professionals who must abide by a code of ethics should be very, very careful. You could lose your ability to make a living over this kind of stuff (if the moral issue alone isn't enough to stop you).

You could write pages on the shenanigans people pull or try to pull with tuition committees. One person recently told me that for his son's bris a few years ago, the mohel asked him to make the payment out to a yeshiva. In the mohel's words it was "win win" - the father gets to make a tax-deductible charitable donation and the mohel had a backroom arrangement with the yeshiva that they'd give him free tuition if he directed all his mohel fees to the school.

Orthonomics said...

To think how many baby boys don't have a proper brit. :(

Anonymous said...


Anonymous said...

I don't think he was born anywhere but Hawaii, but someone we've all heard of -- who has been accused of being Kenyan -- probably claimed foreign citizenship on his college applications to improve his odds of admission to Columbia and perhaps the receipt of financial aid.

Why would someone who claims to be a scholar -- where the rule is "publish or perish" want to do anything other than to brag about his transcripts?

Tuition committees would do well to look in the driveways for late model cars and to simply do a walk-through in a house to see if there is any sign of luxury.

Curious George said...

I would like to know more about this statue of limitations:

Does anyone have a photograph? On what date was it erected?

Mr. Cohen said...

This message is somewhat off-topic, but:

The book GARDEN OF RICHES, translated into English by Rabbi Lazer Brody (a Breslov Rabbi), teaches Jews important lessons about debt.

I recommend this book to all Jews.

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