IRS-Criminal Investigation (CI) Presents: Tax Case of the Month

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November Tax Case of the Month

President, former counsel of Brisbane recycling company sentenced for tax fraud

Northern California residents Joseph Nubla and Henry Ku landed themselves 36 and 30 month prison sentences, respectively, after they conspired to hide more than $18 million in taxable income from the IRS.

Nubla was the president of Brisbane Recycling Company, a rock-crushing business, and Ku was the company’s former counsel. Ku also owned separate companies that were involved in the conspiracy. From 2009 to 2015, Nubla tried to avoid paying corporate income taxes by writing checks to Ku totaling more than $18 million and then deducting the checks as false business expenses on the corporate return. Nubla then instructed Ku to return the money to him personally in various ways including through money transfers, by purchasing three homes, and by writing Nubla cashier's checks totaling $7 million. Nubla did not declare the constructive dividends as income. In 2014 alone, Nubla failed to report more than $5.8 million of income.

Nubla and Ku were both convicted of conspiracy to defraud the U.S., and Nubla was also convicted of tax evasion.

In addition to the sentences, Nubla and Ku were ordered to pay fines of $15,000 and $10,000, respectively, and more than $9.3 million in restitution, a sum they must pay together.

Each month, CI leadership selects one criminal case adjudicated during the previous month to serve as the Tax Case of the Month. This month’s case was investigated by CI’s Oakland Field Office.

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CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.