Gilmore Guilty On 3 Counts In $1.5M Tax Evasion Case, Jury Rules

TRENTON, NJ — After two days of deliberations, a federal jury has found Ocean County Republican boss George Gilmore guilty on three counts in the federal tax evasion case.

The jury verdict, first reported by the Asbury Park Press, comes following a two-week trial before U.S. District Judge Anne E. Thompson in Trenton federal court.

Gilmore, 69, was indicted in January by a federal grand jury on six counts in the case: income tax evasion for calendar years 2013, 2014, and 2015; two counts of filing false tax returns for calendar years 2013 and 2014; two counts of failing to collect, account for, and pay over payroll taxes for two quarters in 2016, and one making false statements on a 2015 loan application submitted to Ocean First Bank, First Assistant U.S. Attorney Rachael A. Honig said at the time.

The jury found Gilmore guilty on the two counts of failing to pay payroll taxes, and one count of submitting a false loan application, but not guilty on two counts of filing false tax returns. The jury could not reach a unanimous verdict on the charge Gilmore evaded income taxes in 2013, 2014, 2015, the report said. Federal authorities alleged he evaded $1.5 million in income taxes and penalties.

Gilmore has been the chairman of the Republican Party in Ocean County since 1996 and has long been viewed as one of the most powerful political bosses in New Jersey. He was first reported to be under investigation in connection with the tax evasion charges in December 2016.

Gilmore also is the chairman of the Ocean County Board of Elections. Investigators subpoenaed records from the election board during its investigation.

Gilmore was an equity partner and shareholder at Gilmore & Monahan P.A., and the U.S. Attorney's office said he exercised primary control over the firm's financial affairs. Gilmore and his partner, Thomas E. Monahan, serve as the attorneys for multiple public bodies in Ocean County and throughout the state. Among the firm's clients are Berkeley Township, Lacey Township, Little Egg Harbor, Plumsted and Seaside Heights. Gilmore was just named township attorney in Howell in 2019 as well.

At trial, federal prosecutors presented evidence of extravagant purchases, according to Asbury Park Press reports on the trial. Among the items: $82,000 on a woolly mammoth tusk, a limited-edition bronze statue of George Washington that cost $33,000; and his 13,000-square-foot home on the water in Toms River, with custom furniture, an infinity pool and a cabana; and a $20,000 Steinway piano.

Gilmore's attorney, Kevin Marino, tried to argue that Gilmore's failure to pay the taxes was because of a hoarding disorder that involved him collecting a number of expensive items, according to an Asbury Park Press report.

Thompson, however, refused to allow testimony from a psychiatrist who was prepared to say Gilmore's issues stemmed from hoarding, according to a Politico report.

Federal prosecutors presented documents and testimony at trial that said because Gilmore exercised significant control over the law firm’s financial affairs, he was responsible for withholding payroll taxes from the gross salary and wages of the law firm’s employees to cover individual income, Social Security and Medicare tax obligations. For the tax quarters ending March 31, 2016, and June 30, 2016, the law firm withheld tax payments from its employees’ checks, but Gilmore failed to pay over in full the payroll taxes due to the IRS, prosecutors said.

Gilmore also was accused of submitting a loan application to Ocean First Bank containing false statements. On Nov. 21, 2014, Gilmore reviewed, signed, and submitted to Ocean First Bank a Uniform Residential Loan Application (URLA) to obtain refinancing of a mortgage loan for $1.5 million with a "cash out" provision that provided Gilmore would obtain cash from the loan. On Jan. 22, 2015, Gilmore submitted another URLA updating the initial application. Gilmore failed to disclose his outstanding 2013 tax liabilities and personal loans that he had obtained from others on the URLAs. Gilmore received $572,000 from the cash out portion of the loan.

Gilmore was found guilty on the three counts in connection that information. The two counts of failing to pay over payroll taxes each carry a maximum penalty of five years in prison, and a $250,000 fine, or twice the gross gain or loss from the offense. The count of loan application fraud carries a maximum penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for July 23, 2019.

Federal prosecutors did not say in a news release whether they would retry Gilmore on the tax evasion charge where the jury failed to reach a verdict.

First Assistant U.S. Attorney Rachael Honig credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, special agents with U.S. Attorney’s Office under the direction of Supervisory Special Agent Thomas Mahoney, and special agents of the FBI Red Bank Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, for the investigation leading to the verdicts.

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