California CPA Indicted for Filing False Tax Returns

A grand jury in San Francisco returned an indictment yesterday charging a California man with filing false tax returns with the IRS.

According to the indictment, Michael M. Gilbert, of San Rafael, filed false tax returns for himself and two business entities he controlled. Gilbert, a Certified Public Accountant since 1985, allegedly underreported the total income his accounting and tax preparation business, M.M. Gilbert & Company Inc. (M.M. Gilbert), received during the years 2017 through 2020. Gilbert allegedly solicited payments from clients of M.M. Gilbert for “tax strategies” and “donations,” among other things, which the clients paid to White Mountain Properties Inc. (White Mountain), another entity Gilbert controlled. Gilbert allegedly did not report these payments as income on White Mountain’s 2017 through 2021 business tax returns. According to the indictment, in 2020 and 2021, Gilbert also transferred more than $5 million from White Mountain to himself and then did not report that income on his individual tax returns.

Gilbert is scheduled for his initial court appearance on Feb. 19 before U.S. Magistrate Judge Laurel Beeler for the Northern District of California. If convicted, Gilbert faces a maximum penalty of three years in prison for each count of filing a false tax return. 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 Karen Kelly of the Justice Department’s Tax Division made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorneys Julia M. Rugg and Patrick Burns of the Tax Division are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.