An economist has been charged with evading payment of approximately $500,000 in income taxes over a 22-year period, citing religious objections.
Federal prosecutors in New York unsealed charges Monday against David Gilmartin, who lived in New York until 2006. He was arrested Monday morning in Phelan, Calif., where he now resides.
The 68-year-old holds a Ph.D. in economics. He provided various economics-related consulting services to employers and clients between 1989 and 2010, including analyzing and reconstructing clinical databases for pharmaceutical companies; performing profitability analyses for credit card companies; conducting statistical analyses for a large pharmaceutical company in connection with a new drug application; and analyzing and preparing testimony for companies involved in patent and antitrust litigation.
“For more than two decades, David Gilmartin, an economist with a Ph.D., allegedly went to great lengths to avoid his legal obligation as a citizen to pay taxes,” said Manhattan U.S. Attorney Preet Bharara in a statement. “Our economy cannot function without everyone paying their fair share of taxes and we will not tolerate those who act as if the tax laws do not apply to them.”
Despite being paid compensation every year between 1989 and 2010, Gilmartin failed to file tax returns with the IRS, and to pay more than $500,000 that he allegedly owed in taxes, according to prosecutors. He used a variety of imaginative strategies to avoid paying taxes. Gilmartin allegedly submitted IRS forms to certain employers in which he falsely and fraudulently claimed to be exempt from taxes, in order to cause the employers not to withhold taxes. He also has been accused of providing someone else’s Social Security number to an employer and represented that it was his.
Prosecutors claim he refused to provide one employer with his Social Security number, citing a purported “religious objection,” in an attempt to prevent the employer from withholding taxes. Gilmartin also allegedly caused checks paid to him as compensation to be made payable to a finance company, in order to pay down a personal line of credit and to prevent the IRS from seizing, pursuant to bank levies, the funds paid to him as compensation.
Prosecutors also claim he caused checks that were paid to him as compensation to be cashed against a personal bank account rather than be deposited. Gilmartin also allegedly caused his paychecks to be endorsed directly to a bank rather than deposited in a personal bank account, in order to pay outstanding balances on his credit card with that bank and to prevent the IRS from seizing, pursuant to bank levies, the funds paid to him as compensation.
He has been charged in a four-count indictment with tax evasion, obstruction of the IRS, failure to file a tax return, and failure to pay taxes. On the tax evasion charge, Gilmartin faces up to five years in prison, and on the IRS obstruction charge up to three years in prison. He also faces up to one year in prison on each of the failure-to-file and failure-to-pay taxes charges.
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