New Jersey man charged with tax evasion and filing false tax returns


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Date: October 18, 2021


Camden, NJ — A Gloucester County, New Jersey man was indicted by a federal grand jury on October 13, for his role in a scheme to defraud the IRS by filing fraudulent income tax returns, following an investigation by special agents of the Internal Revenue Service Criminal Investigation.

Adam Baals Jr., of Woodbury, New Jersey, was indicted on 2 counts of filing false income tax returns in violation of 26 USC 7206(1) and one count of evasion of payment in violation of 26 USC 7201.

According to the indictment, Baals worked as an insurance agent and operated Fidelity Estate Planning LLC (FEP). Individual 1, a licensed insurance agent, was a nominee owner of Senior Marketing Group LLC (SMG). In December 2015, Baals became the President of Senior Marketing Group LLC (SMG). At various times in 2014 and 2015, SMG received sale commissions some of which, were transferred to FEP. At various times for tax years 2014 and 2015 Baals received checks drawn on SMG's account, checks made to cash, as well as cash from SMG's bank account.

For tax years 2014 and 2015, Baals prepared and filed his U.S. individual income tax returns, Forms 1040. The personal income tax returns, Forms 1040, for tax years 2014 and 2015 were electronically signed by Baals and contained written declarations that they were signed under the penalties of perjury. The personal U.S. individual income tax returns filed by Baals were not true and correct for tax years 2014 and 2015 because Baals failed to report income that he received from SMG and failed to report all of FEP's proceeds. The returns did not include approximately $443,300 in taxable income which Baals received from SMG and approximately $32,444 in taxable income which defendant received from FEP. By failing to report this income, Baals failed to pay approximately $123,712 in additional federal income taxes to the United States. Prior to August 2016, the Internal Revenue Service ("IRS") issued a Notice of Deficiency to Baals which informed him that he had additional tax due and owing for tax years 2002 through 2006 in the combined amount of approximately $151,096. Around August 30, 2016, Baals submitted to the IRS a Form 656 (Offer in Compromise) and Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals). Baals signed these forms under penalties of perjury, offering to settle his tax liability of $151,096 for $400. The Offer in Compromise falsely stated that Baals had insufficient funds and income, claiming his gross monthly income was less than $2,431. The Collection Information Statement falsely claimed Baals was not employed and had no monthly salary or assets. He also failed to list any personal bank accounts and certain other assets. Baals knew the forms were false at the time they were submitted because he was receiving income from FEP and SMG.

The two counts of filing a false tax return each carry a statutory maximum prison sentence of three years and the evasion of payment count carries a statutory maximum prison sentence of five years. All of the counts carry a statutory maximum fine equal to the greatest of:

  1. $250,000;
  2. twice the gross amount of any pecuniary gain derived from the offense; or
  3. twice the gross amount of any pecuniary loss sustained by any victims of the offense.

The Government is represented by Assistant US Attorneys Jason Richardson and Daniel Friedman of the US Attorney's Office Criminal Division in Camden.

The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.