Earl Simmons, Tax Fraud, New York 2016

Recording artist and performer Earl Simmons, known professionally as ‘DMX’ or ‘X,’ pleaded guilty in Manhattan federal court to a tax fraud violation. Simmons evaded payment of income taxes from 2010 through 2016, concealing millions of dollars of income from the IRS and avoiding $1.7 million in tax liabilities.

According to the indictment and statements made at the plea proceeding, Simmons, 47, worked as a recording artist, performer, and actor, releasing a series of hip-hop albums that sold millions of records. He has performed at venues across the United States and around the world, and has acted in motion pictures.

As a result of the income Simmons earned from sources including musical recordings and performances, he incurred federal income tax liabilities of approximately $1.7 million from 2002 through 2005, which went unpaid. In 2005, the IRS began efforts to collect Simmons’s unpaid tax liabilities.

During the period from 2010 through 2015, Simmons earned over $2.3 million but did not file personal income tax returns. Instead, he orchestrated a scheme to evade payment of his outstanding tax liabilities, largely by maintaining a cash lifestyle, avoiding the use of a personal bank account, and using the bank accounts of nominees, including his business managers, to pay personal expenses.

Simmons received hundreds of thousands of dollars of royalty income from his music recordings, which he caused to be deposited into the bank accounts of his managers. He also participated in the ‘Celebrity Couples Therapy’ television show in 2011 and 2012 and was paid $125,000 for his participation, but refused to tape the remainder of the show until the check was reissued without withholding taxes.

Simmons took other steps to conceal his income from the IRS and others, including filing a false affidavit in U.S. Bankruptcy Court that listed his income as ‘unknown’ for 2011 and 2012, and as $10,000 for 2013, when in fact he received hundreds of thousands of dollars of income in each of those years.

Acting U.S. Attorney Joon H. Kim said: ‘Today, Earl Simmons, the actor, producer, and recording artist known as DMX, admitted to systematically cheating on his taxes. By insisting to be paid in cash whenever possible and having royalty payments diverted to the accounts of financial surrogates, Simmons concealed hundreds of thousands of dollars of income from the IRS.’

‘No matter who you are or whatever fame you may have achieved, the law applies equally to all, and no one is exempt from the shared obligation to pay our taxes,’ Kim added.

IRSC-CI Special Agent in Charge James D. Robnett said: ‘Mr. Simmons skirted his responsibilities when he chose to ignore his duty to pay his taxes. We should not forget that the ultimate victims in tax fraud cases are the honest US taxpayers who file and pay their taxes.’