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Rutherford lawyer, 69, gets 3 years for $1.2 million tax dodge

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YOU READ IT HERE FIRST: A 69-year-old disbarred lawyer from Rutherford was sentenced today to three years for stiffing the IRS out of nearly $1.2 million on $3.36 million in unreported income.

Following his prison term, Joseph Gallagher will be under two years of supervised release, U.S. District Judge Noel L. Hillman ordered today in Camden.

He also fined Gallagher $60,000 annd required him to pay his more
than $1.1 million in outstanding taxes to the IRS, plus interest and penalties.

Gallagher pleaded guilty to a single count of tax evasion in August 2011 after the government said he either submitted false tax returns or failed to file any for five years.

For at least five years, Gallagher used a consulting company that he created — and operated by a conspirator — to duck the IRS “by having his income from working as a tax preparer deposited into the company’s bank account,” U.S. Attorney Paul J. Fishman said.

All told, Gallagher failed to report $590,513, $600,157 and $682,373 for the calendar years 2004, 2005 and 2006, respectively, as well as for 2007 ($715,694) and 2008  ($770,445), the government said.

Fishman credited special agents of the IRS for producing the case, which was prosecuted by Jacob T. Elberg, Deputy Chief of the U.S. Attorney’s Office.

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