Ocean County GOP Chair Gilmore Indicted On $1M Tax Evasion: Feds

TRENTON, NJ — George Gilmore, a Toms River attorney and the chairman of the Republican Party in Ocean County, has been indicted on charges of tax evasion totaling more than $1.5 millon by a federal grand jury, the U.S. Attorney's Office announced Thursday.

Gilmore, 69, is accused in a six-count indictment of income tax evasion for calendar years 2013, 2014, and 2015; two counts of filing false tax returns for calendar years 2013 and 2014; failing to collect, account for, and pay over payroll taxes for two quarters in 2016, and making false statements on a 2015 loan application submitted to Ocean First Bank, First Assistant U.S. Attorney Rachael A. Honig announced.

Gilmore, who has been the county chairman since 1996 and one of the most powerful political bosses in New Jersey, was first reported to be under investigation in December 2016. But there had been no further information about the probe until Thursday's announcement.

Gilmore worked as 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.

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

A March 2017 Politico report that noted Gilmore's standing as being among the state’s most important Republican figures said Gilmore had mortgaged his properties several times with a number of people with political connections to him.

Gilmore filed on behalf of himself and his wife, Joanne, federal income tax returns declaring that he owed $493,526 for calendar year 2013, $321,470 for 2014, and $311,287 for 2015. Despite admitting that he owed taxes for each of these years, Gilmore made no estimated tax payments and failed to pay the federal individual income taxes that he owed.

Instead, federal authorities allege, Gilmore spent more than $2.5 million on personal expenses, including substantial home remodeling costs, vacations, and the acquisition of antiques, artwork, and collectibles from January 2014 to December 2016. By Dec. 31, 2016, based on the tax due and owing that Gilmore reported on the returns, he owed the IRS $1,520,329 in taxes, penalties, and interest.

According to the indictment, Gilmore concealed information from the IRS and falsely classified income, made false and misleading statements to IRS personnel, and filed false tax returns that materially understated the true amount of income that he received from the law firm. Those actions allegedly included:

• From January 2014 to December 2016, Gilmore used the law firm’s bank accounts to pay more than $2 million worth of personal expenses, including obtaining checks to cash and cash advances on a corporate credit card. Gilmore falsely classified payments as "shareholder loans" instead of income to him.
• On Oct. 16, 2014, Gilmore sent the IRS a $493,526 check as payment for his 2013 taxes despite having no more than $2,500 in his personal bank account at the time. Gilmore’s check bounced and he never resubmitted payment in lieu of the bounced check. From November 2014, when he was notified by the IRS concerning the bounced check, to the end of December 2014, Gilmore spent more than $80,000 toward the construction of his home and to purchase artwork, antiques, and collectibles and more than $25,000 in mortgages and related expenses for five real estate properties that he owed.
• From November 2014 to October 2015, Gilmore falsely represented to the IRS collections officer that he would make partial payments to the IRS for his outstanding tax liability, but made none.
• Gilmore filed false tax returns for 2013 and 2014, which under reported his actual income from the law firm.

Because he exercised significant control over the law firm’s financial affairs, Gilmore was a person 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, authorities allege.

Gilmore also submitted 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 to refinance a mortgage 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 application updating the initial application. Gilmore failed to disclose his outstanding 2013 tax liabilities and personal loans he had obtained from others on the two applications. Gilmore received $572,000 from the cash out portion of the loan, the proceeds of which he did not apply to his unpaid taxes.

The tax evasion count and the two counts of failing to collect, account for, and 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 two counts of filing a false tax return each carry a maximum penalty of three years in prison, and a $250,000 fine, or twice the gross gain or loss from the offense. The count alleging loan application fraud carries a maximum penalty of 30 years in prison and a $1 million fine. Gilmore will be arraigned at a date to be determined.

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 today’s indictment.

The government is represented by Deputy U.S. Attorney Matthew J. Skahill; Assistant U.S. Attorney Jihee G. Suh of the U.S. Attorney’s Office Special Prosecutions Division; and Trial Attorney Thomas F. Koelbl of the U.S. Department of Justice - Tax Division.

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George Gilmore at the 2019 Ocean County reorganization meeting, photo via Ocean County public information staff