Cornelius Attorney Pleads Guilty To Filing Fraudulent Tax Returns

CORNELIUS, NC — A Cornelius attorney who counseled clients about how to set up offshore corporations and bank accounts has pled guilty in federal court to filing a false tax return in order to dodge paying more than $100,000 in taxes, according to the U.S. Attorney for the Western District of North Carolina.

John Francis Hanzel, 70, made the pleading before U.S. Magistrate Judge David Cayer during a Nov. 8 court appearance.

According to court documents, Hanzel’s law firm, John F. Hanzel, P.A., counseled clients to set up the offshore accounts “to purportedly protect income and assets from creditors, including the IRS,” the U.S. Attorney’s office said.

“From at least 2011 through 2014, Hanzel did not have a personal bank account and did not pay himself a salary from his law firm,” the U.S. Attorney’s office said in a released statement. “Instead, Hanzel wrote checks from his law firm account to pay for personal expenses including utility bills, mortgage payments, and credit cards. Hanzel fraudulently deducted personal expenses paid out of his law firm bank account as business expenses, including by falsely categorizing such as expenses as costs of goods sold and other deductions.”

During the four year period, say federal officials, he reported minimal income on his federal tax return of less than $73,000 for the four years, paying less than $5,500 in taxes.

The tax loss was more than $100,000, court documents allege.

“Hanzel’s substantial personal expenditures during the time period include payments of more than $297,000 on luxury vehicles and a boat, and payments for numerous other large personal items such as jewelry and plastic surgery,” the U.S. Attorney’s office said in a statement.

Hanzel, who was released on bond, now faces a maximum prison term of three years and a $250,000 fine. A sentencing date has not been set, officials said.