Defendant diverted income from his clothing business and dealt in cash to evade taxes Date: April 30, 2024 Contact: newsroom@ci.irs.gov A California man pleaded guilty today to evading more than $1 million of federal and state taxes. According to court documents and statements made in court, Haim Jerry Kohen, of Beverly Hills, California, owned and operated a business that bought and sold bulk quantities of used clothing. He spent more than a decade underreporting or not reporting income on his tax returns. He attempted to conceal this income from the IRS by diverting it from his business to himself and by dealing in cash. For example, he underreported his business’ income by diverting cash payments received from a significant customer. Kohen kept the cash for himself instead of depositing it into his business’ bank account. Kohen did not report the diverted cash on the business’ returns or on his personal returns. Additionally, in November 2013, that same customer owed Kohen’s business over $648,000. Kohen and the customer executed a promissory note where the customer agreed to repay the debt to Kohen personally, and not to his business. Kohen received payments pursuant to the note in cash and did not report them on any tax return. Over the years, Kohn also loaned money to people and did not report the interest payments he received on his personal returns. Kohen also did not report rental income from two properties he owned in Beverly Hills and Tarzana, California. Kohen bought the Beverly Hills property in 2011 and soon thereafter deeded it to close family members. However, Kohen continued to collect the rental income for the property and exercised ownership and control over it. He also did not report the rental income he received from the Tarzana property. In total, Kohen caused a tax loss to the IRS and State of California of at least $1,196,802. Kohen is scheduled to be sentenced on Oct. 1 and faces a maximum penalty of five years in prison. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Martin Estrada of the Central District of California made the announcement. The International Tax and Financial Crimes group of IRS Criminal Investigation is investigating the case. Senior Litigation Counsel Mark F. Daly and Trial Attorneys Sara E. Henderson and John C. Gerardi of the Tax Division are prosecuting the case.
