Theodore L. Freedman, Tax Fraud, New York 2013

Former partner at a major international law firm Theodore L. Freedman, 65, of Pine Plains, New York, has pleaded guilty to four counts of tax fraud for under-reporting his partnership income at the firm by a total of approximately $2 million from 2001 to 2004.

According to the indictment and statements made at today’s plea proceeding, Freedman was a senior partner in the New York office of a major international law firm, where he was a member of the firm’s restructuring group. In that capacity, Freedman received income that was calculated as a percentage of the firm’s partnership income for a given year.

The firm issued Freedman the IRS form that reports an individual partner’s share of income or loss from the partnership. According to the form, Freedman’s aggregate income for calendar years 2001 through 2004 was approximately $5,388,699.

Freedman self-prepared, signed, and filed tax returns for calendar years 2001 through 2004. Rather than reporting the true and correct amount of partnership income he received from the firm for the years in question, Freedman falsely and fraudulently under-reported his income in the aggregate amount of approximately $2,097,211.

Manhattan U.S. Attorney Preet Bharara stated, ‘Theodore Freedman was an attorney at a high-powered and prestigious law firm who lied about his multi-million dollar compensation in order to avoid paying taxes, breaking the law and violating his professional code of conduct.’

Freedman faces a maximum sentence of three years in prison on each of the tax fraud counts, for a total maximum sentence of 12 years in prison. As part of his plea agreement, Freedman is also required to pay more than $671,000 in restitution to the IRS and more than $169,000 in restitution to New York State.

He is scheduled to be sentenced by U.S. District Judge Deborah A. Batts on September 17, 2013, at 10:30 a.m.

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