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Partner Busted for Not Filing Taxes for 5 Years
Amanda Bronstad
The National Law Journal
Allen J. Gross, a partner at Los Angeles-based Mitchell, Silberberg & Knupp, pleaded not guilty on Monday to five felony counts of failing to file his state income tax returns from 2003 through 2007.
Gross was arrested last week at his home in West Los Angeles.
According to the Los Angeles County, Calif., district attorney's office, Gross made $2.3 million in income during the period in question. The district attorney's office is seeking $850,000 in back taxes, penalties, interest and costs. If convicted, Gross faces more than five years in prison.
David Berton, the deputy district attorney on the case, said that the California Franchise Tax Board referred the matter to his office because "they believe there's evidence that shows there is intent to evade."
While declining to specify the evidence, he said that, "generally, the Franchise Tax Board looks to cases in which there's a threshold dollar amount. Also, it's over a period of time — a course of years — that there is a similar course of conduct."
Gross's lawyer, Anthony Salerno of Los Angeles criminal defense firm Salerno & Associates, described the problem as a "misunderstanding as to what Allen's obligations were."
"There was no fraudulent type of intent going on," he said. "The best way to characterize it is it was a technical violation of tax reporting rules."
Salerno said that prosecutors have been "unnecessarily heavy-handed" in the case. "This could have been resolved in a civil manner, but they acted in a hard-core way," he said.
As of Tuesday, Mitchell, Silberberg & Knupp had removed Gross's name from the firm's Web site.
In an e-mailed statement, Thomas Lambert, managing partner at Mitchell, Silberberg & Knupp, said: "The firm's management was unaware of this apparent Franchise Tax Board criminal investigation or of Allen's arrest until Monday morning. Out of respect for the legal process, we have no further comme ...
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