Damian Williams, the United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent in Charge of the Internal Revenue Service – Criminal Investigation (“IRS-CI”) New York Field Office, and Keith Kruskall, Acting Special Agent in Charge of the New York Office of the Drug Enforcement Administration (“DEA”), today announced that defendant JORDAN SUDBERG pled guilty to tax evasion for the calendar years 2015 through 2017, in connection with false deductions from a scheme involving his issuance of hundreds of business checks falsely purporting to be payments for business services, which he provided in exchange for cash to a black market money exchange network. As part of his plea SUDBERG agreed to pay $551,660 in restitution to the Internal Revenue Service (“IRS”), and forfeit an additional $243,257. SUDGERG pled guilty today before U.S. District Judge Paul A. Crotty.
U.S. Attorney Damian Williams said: “As he admitted in court today, Jordan Sudberg engaged in a years-long pattern of fabricating false business expenses to conceal from the IRS large portions of his substantial income earned from his medical practices. He fraudulently claimed more than $1 million in deductions that should have been reported to the IRS as taxable income, and allowed other individuals to create purportedly legitimate origin for their illicit cash in the process. Now Sudberg awaits sentencing for his crime.”
IRS-CI Special Agent in Charge Thomas Fattorusso said: “Medical professionals should be in the business of caring for people, not evading taxes. IRS-CI agents are specially trained to detect tax fraud – even elaborate schemes like the one Sudberg allegedly devised.”
DEA Acting Special Agent in Charge Keith Kruskall said: “This defendant allegedly engaged in a scheme where he purposefully claimed a significantly lower income to evade U.S. tax law. Thanks to the dedication of our law enforcement partners, the defendant will finally be paying his fair share.”
According to the allegations contained in the Information to which SUDBERG pled guilty, a Civil Forfeiture Complaint filed against funds seized from SUDBERG, a Criminal Complaint and Information filed against SUDBERG’s co-conspirator Hua Fen Bi, and statements made in court:
From at least 2015 through 2017, SUDBERG devised and perpetrated a scheme to evade a substantial portion of his personal income taxes. During that period, SUDBERG owned two S-corporations through which he operated a medical practice, specializing in pain management, at locations located in Manhattan, Long Island, and Queens, New York. SUDBERG issued hundreds of checks made payable to various companies and falsely purporting to be payments for business services. In fact, those companies had not performed any business services for SUDBERG’s corporations. In exchange for the checks, SUDBERG received sums of cash that were equal to the value of the checks minus a small fee. SUDBERG falsely reported to the IRS that the checks were for legitimate business expenses and claimed deductions in the amount of the checks, thereby substantially understating his taxable income.
SUDBERG’s tax evasion helped support an unlicensed money services network operated by a number of co-conspirators, including Hua Fen Bi, who was sentenced by U.S. District Judge Colleen McMahon on May 24, 2021, for his role in conspiring to operate an unlicensed money transmitting business. This network permitted individuals to exchange cash for business checks like those provided by SUDBERG, thereby generating a false and nominally legitimate source of funds, including for the laundering of narcotics proceeds.
SUDBERG pled guilty to one count of tax evasion, which carries a maximum penalty of five years in prison. The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
SUDBERG is scheduled to be sentenced on February 23, 2022.
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Mr. Williams praised the outstanding work of the Internal Revenue Service and the Drug Enforcement Administration on this case. He also thanked the Office of the Inspector General of the United States Department of Health and Human Services and the New York Drug Enforcement Task Force for their support and assistance.
The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprise Unit. Assistant U.S. Attorneys Emily Deininger and Alexandra Rothman are in charge of the case.
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