LA Mogul Sarshar Gets 24 Months for $23.5M Tax Dodge

LOS ANGELES, CA – Masud Sarshar, a Los Angeles businessman, is trading designer suits for prison stripes after being sentenced to 24 months behind bars for a brazen scheme to hide over $23.5 million in offshore bank accounts. The Justice Department announced the sentence today, a small victory in a war against those who think they can cheat the system.

Court documents reveal that Sarshar, a U.S. citizen and owner of Apparel Limited Inc., maintained undeclared accounts at Bank Leumi and another Israeli bank, using both his own name and shell entities. For decades, he allegedly colluded with at least two bank relationship managers to funnel tens of millions in assets away from the IRS. Between 2006 and 2009 alone, Sarshar diverted over $21 million in untaxed income to these secret accounts, adding another $2.5 million in interest – all unreported on his tax returns.

The scheme was intricate, bordering on absurd. According to Acting Deputy Assistant Attorney General Stuart M. Goldberg, Sarshar “used every trick to avoid paying his taxes.” This included having account statements smuggled into the U.S. hidden *inside the necklace of a Bank Leumi relationship manager*. Meetings with bank staff frequently took place in his car, and he even obtained Iranian and Israeli passports in a desperate attempt to disguise his U.S. citizenship from bank compliance departments. When that failed, funds were shifted to yet *another* Israeli bank.

Sarshar didn’t stop there. He utilized “back-to-back” loans facilitated by Bank Leumi, collateralized with funds from his Israeli Bank A account, to repatriate approximately $19 million to the U.S. without leaving a traceable paper trail. The goal? To keep the money flowing while keeping the IRS in the dark. It was a calculated, multi-layered attempt to defraud the government and, as Chief Richard Weber of IRS Criminal Investigation bluntly put it, “cheat…law abiding taxpayers.”

The relationship managers, identified as RM1 from Israeli Bank A and RM2 from Bank Leumi, actively aided Sarshar, providing in-person account information instead of mailing statements and offering advice on how to evade detection. They even helped facilitate the passport scheme. The investigation highlights not just Sarshar’s greed, but the willingness of some within the financial system to enable criminal activity.

While 24 months is a start, it remains to be seen if this sentence will truly deter others. The Department of Justice and the IRS are sending a message: hiding assets offshore is no longer a safe bet. But in a world of complex financial schemes and global banking, the fight to hold these individuals accountable is far from over. Sarshar’s case serves as a stark reminder that even the most elaborate schemes eventually crumble under the weight of investigation and prosecution.