Not So Safe
We all know why people keep a safe in their homes. We also all know that a safe doesn’t completely protect one’s valuables from damage, destruction, or theft. Criminal defense attorney Stanley Needleman not only lost valuables stored in his safe, but also will very likely lose something invaluable: His freedom.
Yesterday, Mr. Needleman pleaded guilty in federal court to income tax evasion and structuring financial transactions, and consented to disbarment. Needleman practiced law in Maryland.
Needleman implemented the following billing structure with his clients: He required a one-time, up front “engagement fee” for representation. The fee was not tailored to the amount of work involved.
The “engagement fee” is not the same as a “retainer fee.” The difference is that the funds from the latter are typically applied to invoices as services are provided. If, at the conclusion of the matter, a balance of the retainer fee remains, the client may obtain a refund. The engagement fee, at least in the case of Mr. Needleman, however, was a nonrefundable payment up front.
Clearly, Needleman was required to report as income his “engagement fee” upon receipt. The problem: He often didn’t.
According to authorities, Needleman vastly underreported his income earned from engagement fees, and took steps to conceal the income. Instead of living a lavish lifestyle with his underreported income, he stored large amounts of the cash in a safe in his basement. In addition, over several years, he made various bank deposits in amounts slightly less than $10,000 in order to avoid the bank from issuing Currency Transaction Reports. That is known as “structuring,” and is against the law.
Ultimately, he broke the law (by structuring cash transactions) in an attempt to avoid getting caught for breaking another law (income tax evasion). That’s quite the lose-lose situation for a criminal defense attorney. Actually, it’s lose-lose-lose in this case, as he can no longer practice law.
Needleman faces up to five years of imprisonment for income tax evasion, and up to ten years for structuring financial transactions. His sentencing is scheduled for December 15.
(Hat Tip: The Blog of LegalTimes)