Archive for the ‘Politics’ Category

Rotten Fruits of a Former Assemblyman’s Labor

July 25th, 2012 1 comment

In 2004, Jimmy Meng made history after becoming the first Asian American elected to the New York State legislature. His daughter, Grace Meng, followed in her father’s footsteps by winning the 2008 election for the 22nd assembly district in Flushing, Queens. She still holds the position today and is now seeking a seat in Congress as the Democratic nominee for New York’s 5th congressional district.

Not all is well with the Meng family, however. Yesterday, Jimmy Meng was arrested on federal wire charges, reports the New York Times.

Allegedly, in late 2011 Meng solicited $80,000 from a friend facing criminal tax charges in Manhattan. In exchange, Meng promised to bribe federal prosecutors in order for his friend to receive a more lenient sentence.

Yesterday, Meng’s friend showed up at Meng’s lumber yard in Flushing with a fruit basket and handed it over to Meng. Inside the basket was $80,000 cash.

After Meng was arrested, federal authorities sought to turn him into a cooperating witness as part of a larger corruption investigation, according to the NY Daily News.

He refused the offer, and now faces up to 20 years in prison.

The complaint notes there is no evidence Meng actually approached any federal prosecutors regarding his friend’s tax charges.

Meng’s daughter is doing what she can to minimize the blow to her campaign, saying, “I am independent of my father—always have been, always will be.”

Hog versus Rooster

July 8th, 2012 No comments

Last February Cook County Commissioner William Beavers was indicted for three separate counts of filing false income tax returns. Beavers has adamantly denied any wrongdoing.

Last week, Beavers held a press conference to further emphasize his innocence as a December trial date looms, the Chicago Sun-Times reports.

Referencing former U.S. Attorney Patrick Fitzgerald, who pushed to bring the charges, Beavers said, “He’s a rooster without nuts, a capon. OK? That’s what he is, a capon.”

I’ll let you look up what a capon is.

Beavers shed some light regarding his defense. In the indictment, Beavers allegedly used more than $68,000 from a campaign account in 2006 to boost his city pensions without paying income tax on the funds. At the press conference, Beavers shared bank statements reflecting that the campaign funds received was in fact a loan he repaid in 2009.

Beavers is a fighter. I wouldn’t be surprised if he takes this matter to trial just for the satisfaction of victory.

Hog Loses Some of His Nuts

February 23rd, 2012 1 comment

Politicians in Illinois are struggling to keep their tax affairs in straight order. Last October, the Mayor of Channahon pleaded guilty to two counts of income tax evasion.

Earlier today, William Beavers, a Commissioner of Cook County, was indicted for three separate counts for filing false income tax returns. Beavers is known for calling himself the “Hog With the Big Nuts.”

You can read the indictment here. From the U.S. Department of Justice press release:

Beavers allegedly concealed his under-reporting of income and underpayment of taxes on thousands of dollars that he converted to personal use from his campaign accounts – including more than $68,000 in personal gain on one occasion that was not reported – as well as from his county discretionary spending account. Between 2006 and 2008, Beavers allegedly paid himself more than $225,000 from three separate campaign accounts and used at least a portion of those funds for personal purposes, including gambling. In 2006, he used more than $68,000 from a campaign account to boost his city pension, and between 2006 and 2008, he used his $1,200 monthly county contingency account for personal purposes without reporting any of these funds as income on his federal tax returns, the indictment alleges.

A Chicago Tribune reporter reached out to Beavers for comment. Beavers claims he was indicted because he refused to wear a wire to assist authorities with an investigation of John Daley, a fellow Commissioner of Cook County.

“They wanted me to wire up, and I’m not wiring up. I’m no stool pigeon. It’s just not going to happen,” Beavers said.

Beavers is 77 years old. He sounds like a man who doesn’t like to get pushed around. At his age, I don’t blame him. But that’s no excuse for tax fraud. We’ll see how this plays out.

No Way, Dr. No

November 14th, 2011 1 comment

The country’s budget deficit is nearing $15 trillion. Flurries of proposals attempting to address our nation’s debt fall upon us every day. Some proposals, however, leave me scratching my head.

Earlier today, Oklahoma Senator Tom Coburn released a report entitled “Subsidies of the Rich and Famous.” (Hat tip: Politico.) The report highlights some government payments paid to and tax benefits claimed by millionaires, and then concludes that they should be reduced or eliminated.

We get the idea. The rich can afford to live less large than the blue-collars as part of a plan to slow down the growing deficit. What Mr. Coburn fails to tell us, however, is that some of the tax breaks he suggests we eliminate would impact not just the rich and famous. They would impact everybody.

Consider eliminating the deduction for gambling losses, says Mr. Coburn. He states that millionaires claimed $21 billion in gambling losses between 2006 and 2009. Let’s assume he’s right. What Mr. Coburn doesn’t point out, however, is that these millionaires must have reported at least $21 billion in gambling winnings over the same period.

As Mr. Coburn tells us, casual gamblers must report all gambling winnings and cannot deduct gambling losses in excess of gambling winnings. If we eliminate the deduction, then taxpayers would have to pay tax on phantom income.

Here’s a simple example to illustrate. Suppose Donald Trump made two visits to the casino in 2010. During the first visit, he won $200,000 playing blackjack. During the second visit, he lost $200,000 playing blackjack. Under current law, he must claim $200,000 in gambling winnings on line 21 of his 2010 Form 1040, and may deduct $200,000 in gambling losses on his Schedule A. If Donald could not take the gambling loss deduction, then he would pay income tax on the $200,000 in gambling winnings. In other words, Donald would pay tax on gambling winnings despite breaking even from gambling in 2010.

Sure, millionaires can afford to pay more in taxes. But what about the millions of non-millionaires who can’t? We’ve seen non-millionaire taxpayers stuck with state income tax bills on phantom gambling winnings in New York and Wisconsin, among others.

Furthermore, removing the gambling loss deduction from the Internal Revenue Code could have a crippling effect on casino revenues. Who wants to gamble when one must pay tax after breaking even?

I applaud Mr. Coburn’s efforts to examine various payments and benefits that our nation’s millionaires receive. I’m sure there are some items appropriate for us to change. With respect to gambling losses, his examination is far too short-sighted.

Mr. Coburn is known as “Dr. No” because he has a tendency to place holds on and vote against bills he views unconstitutional. This time around, I must say no to “Dr. No.”

Categories: Gambling, Politics Tags:

Florida Congressman Under FBI and IRS Investigation

July 23rd, 2011 No comments

David Rivera is a Republican member of the House of Representatives, representing Florida’s 25th congressional district, which is based in South Florida. The Miami Herald is reporting that Rivera is now under investigation by the FBI and IRS for income tax evasion.

Authorities are examining a $1 million consulting contract between Flagler Dog Track, now known as Magic City Casino, and Millennium Marketing, which is co-owned by Rivera’s mother and her business partner. In October 2006, Millennium was hired to assist Flagler with a campaign to expand gambling in Miami-Dade County by having casino-style slot machines at pari-mutuels. Voters approved the expansion in January 2008.

The focus of the investigation is on Rivera’s work performed on the campaign on behalf of Flagler that was not disclosed as income. An attorney for Magic City claims that Rivera approached Flagler about the pro-slots campaign, and that neither Rivera’s mother nor her business partner were involved in the contract negotiations. Allegedly, Rivera did not report as income various payments received by Millennium under the contract. Although Rivera initially denied receiving any payments for work on the slots campaign, he later admitted to receiving “loans” from Millennium.

Like any good lawyer should, I must note that Rivera stands innocent until proven guilty. Rivera recently stated in an e-mail that federal authorities have not contacted him regarding the investigation. We’ll see what the investigation reveals, if anything.

Whether or not he’s guilty, it seems like Rivera made some poorly calculated moves. People are going to ask questions about a contract involving a political campaign and six figure payments that a congressman was closely tied to, particularly if he was initially quiet about it. It just smells of wrongdoing.

Categories: Florida, IRS, Politics Tags:
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