United States Attorney's Office District of Connecticut
Press Release

WEST HARTFORD MAN PLEADS GUILTY TO TAX FRAUD

Kevin J. O'Connor, United States Attorney for the District of Connecticut, announced that MARC C. ABRAHMS, age 55, of 6 Chesterfield Lane, West Hartford, Connecticut, pleaded guilty today to a two-count Information charging him with tax fraud.

In proceedings today before Senior U.S. District Judge Alfred V. Covello in United States District Court in Hartford, ABRAHMS, the former president and sole-shareholder of Abrahms Group Benefits Inc. and Abrahms Life Services, Inc. in Newington, Connecticut, admitted that for the years 1997 through 2000, he filed materially false corporate income tax returns in which he improperly claimed deductions for approximately $729,000 worth of non-business-related expenses, including payments for domestic help, household services, personal travel and other expenses for the defendant's personal benefit. According to statements made by the prosecutor in court, the non-business-related expenses included, among other things, more than $500,000 in salary payments to ABRAHMS' girlfriend and two sons, even though they did not work at the insurance companies; $84,500 to workers who provided housekeeping, nanny and personal shopping services; $53,518 to workers who provided landscaping, electrical work, painting and woodworking for ABRAHMS' home; $23,000 in personal travel to Paris, Hawaii, Vancouver, Tahiti and Mexico City; and $59,000 in miscellaneous expenses, including those associated with his son's bar mitzvah, a 50th birthday party and a planned wedding reception.

ABRAHMS also admitted that the individual income tax returns he filed between 1997 and 2000 materially understated the amount of income he earned during those years by failing to include as income the value of the personal expenditures paid for by Abrahms Group Benefits Inc. and Abrahms Life Services Inc. ABRAHMS acknowledged that he owes the Internal Revenue Service approximately $297,525 in back taxes, exclusive of penalties and interest, as a result of his willful failure to file accurate personal and corporate income tax returns.

"Individuals who cheat the government out of tax revenue also cheat millions of Americans who honestly pay their fair share of taxes every year," U.S. Attorney O'Connor stated. "As we are now in the midst of tax season, the lesson here is important: This Office will investigate and prosecute those who seek to cheat the Government by avoiding the payment of taxes."

After entering his plea, ABRAHMS was released on $10,000 non-surety bond. ABRAHMS faces a possible term of imprisonment of up to three years on each count of conviction, a term of supervised release of up to one year and a fine of up to $250,000 when he is sentenced on May 23, 2004.

This case is being investigated by the Internal Revenue Service, Criminal Investigation Division, and is being prosecuted by Supervisory Assistant United States Attorney Ronald S. Apter.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov