A Bradford doctor was sentenced Friday in Erie to serve 24
months of federal incarceration for income tax evasion.
Martin D. Jacobs, doctor of internal medicine, was also
sentenced to three years supervised release, pay a ,5,000 fine, and
ordered to pay all back taxes. That amount was not immediately
clear, as the civil division of the IRS can pursue interest and
penalties against Jacobs as well, according to Special Agent Andrew
Hromoko of the Department of the Treasury.
Jacobs had pleaded guilty to one count of income tax evasion in
July.
“Jacobs will be allowed to self report to prison, which will be
coordinated by the U.S. Marshal’s office and Bureau of Prisons,”
Hromoko said.
Jacobs had been asking for a sentence of home confinement and
probation, and several of his patients from Bradford had written
letters on his behalf to U.S. District Judge Sean McLaughlin for
consideration at the time of sentencing.
The prosecution, led by Assistant U.S. Attorney Marshall
Piccinini, objected to Jacobs’ request, saying the doctor had used
“sophisticated means in perpetrating the crime to which he
pled.”
Piccinini argued that between 1997 and 2006, “Jacobs
purposefully evaded paying his federal income taxes, sought to hide
various personal assets from the IRS, failed to disclose the
existence of cashier’s checks, transferred money to foreign bank
accounts, used a false Social Security number to open bank accounts
into which assets were transferred and established a trust account
in New Jersey into which assets were to be transferred.”
After several years of not paying income taxes, Jacobs used “a
variety of tax protestor-style arguments concerning his obligation
to pay taxes.”
Piccinini said that Jacobs created the “Jacobs Jersey Trust” in
New Jersey and then purchased a vehicle in 2001 using ,27,791.16
from that account. Jacobs said the account was an “estate and
divorce planning trust,” Piccinini said, but countered that Jacobs
had divorced in 1998.
Another vehicle was purchased in 2003 with funds from an
undisclosed account which Jacobs had opened using a false Social
Security number, the prosecutor alleged, saying that vehicle was
placed in the name of the Trust as well.
Referring to cashier’s checks, the prosecutor said Jacobs
“claims that (they) were used to pay his wife under the terms of
their divorce settlement agreement. However, at the time Jacobs
began to meet with the IRS, his divorce settlement was no longer a
major financial concern.”
Piccinini said that on May 21, 2004, “the very day Jacobs knew
he was the subject of an IRS criminal investigation, he deposited a
,78,404.43 cashier’s check into the undisclosed, false Social
Security number bearing” bank account and then had the funds wire
transferred to a Swiss bank account. Three days later, he did the
same thing, according to Piccinini.
The prosecutor also said that in July 1998, Jacobs deposited
,131,442.33 in undisclosed cashier’s checks “that were supposedly
in existence to pay his wife in the divorce” into another
undisclosed bank account also opened with a false Social Security
number. He then transferred that money to an account in the
Netherlands Antilles.
Those accounts were successfully used to hide assets, Piccinini
said, adding that Jacobs claims to have ,266,563.27 in his Swiss
bank account currently.
“Finally, without sufficient explanation, Jacobs opened bank
accounts in another person’s Social Security number,” the
prosecutor said, calling his conduct “just another attempt to make
it difficult for the IRS to detect his assets and collect Jacobs’
delinquent taxes.”
