Indianapolis doctor gets probation after hiding $1.2 million from IRS
INDIANAPOLIS (WISH) — An Indianapolis dermatologist has been convicted after pleading guilty to filing a false tax return and concealing over $1.2 million in unreported income over the span of three years, the U.S. Department of Justice said Friday.
According to court documents, between 2017 and 2020, David Gerstein, 63, of Hamilton County, unreported his taxable income by at least $1.2 million, as a result, avoiding $360,669 in income taxes that he owed.
Gerstein was ordered by a judge to serve three years on probation, and the first six months which must be served at a residential reentry management center. He also must pay a fine of $95,000.
Gerstein has been the sole owner of his dermatology practice in Indianapolis since 1997 and reported his business income to the Internal Revenue Service on his personal tax return.
Court docs say that Gerstein used several different methods to hide his true income. He lied to his accountant and told them that all income from his medical practice flowed into a single business bank account, and only provided records from that account. Gerstein had other hidden accounts that he would use to deposit money from his business.
To further conceal the hidden accounts, Gerstein would routinely break up cash deposits of more than $10,000 and make multiple cash deposits on the same day. This is known as “structuring transactions,” which is an illegal practice. This illegal practice is intended to avoid banks from reporting large cash deposits to the IRS.
Gerstein continued to attempt to conceal the existence of some of his bank accounts even when interviewed by the IRS-Criminal Investigation Agents, according to a release.
“Every year, millions of Americans pay all the taxes they owe while criminals like this defendant lie and scheme to avoid paying their fair share,” said Zachary A. Myers, U.S. attorney for the Southern District of Indiana. “Wealthy tax cheats drive up taxes for law-abiding people and deprive us of the government services to which we are entitled. Willfully falsifying tax returns is not a victimless crime, and the sentence imposed today demonstrates that those who break the law will be held accountable. I applaud the Internal Revenue Service-Criminal Investigation for their efforts to uncover these schemes and we will continue to work together to enforce our laws on behalf of the American people.”