Ocean County Republican Chairman George Gilmore has been indicted by a federal grand jury on charges of evasion of taxes totaling more than $1 million.
Gilmore, 69, of Toms River, was charged in a six-count indictment with one count of income tax evasion for 2013, 2014 and 2015; two counts of filing false tax returns for 2013 and 2014; failing to collect, account for, and pay over payroll taxes for two quarters in 2016; and making false statements on a 2015 loan application submitted to OceanFirst Bank, according to First Assistant U.S. Attorney Rachael A. Honig.
According to the indictment, from January 2014 to December 2016, Gilmore spent more than $2.5 million on personal expenses, including home remodeling costs, vacations and the acquisition of antiques, artwork and collectibles.
By Dec. 31, 2016, based on the tax due and owing that Gilmore reported on the returns, he owed the Internal Revenue Service $1.5 million in taxes, penalties and interest, according to the U.S. Attorney.
Attorney Kevin Marino, who represents Gilmore, said, “After serving grand jury subpoenas seeking evidence of political corruption in every town with which George Gilmore conducts business, literally for years, the U.S. Attorney’s Office could manage only this lame, ersatz tax case.
“Mr. Gilmore faithfully reported every penny of his income, repeatedly expressed his intention to pay his taxes together with interest and penalties, freely conceded he was unable to do so in a timely fashion and shared with the government the reasons why. That is not tax evasion by anyone’s lights. We look forward to Mr. Gilmore’s full vindication at trial,” Marino said.
According to the U.S. Attorney’s Office, documents revealed Gilmore allegedly concealed information from the IRS and falsely classified income, made false and misleading statements to IRS personnel and filed false tax returns that understated the true amount of income he received from the law firm Gilmore & Monahan P.A., Toms River.
The government alleges that:
• From January 2014 to December 2016, Gilmore used the law firm’s bank accounts to pay more than $2 million worth of personal expenses. Gilmore allegedly falsely classified payments as “shareholder loans” instead of income to him;
• On Oct. 16, 2014, Gilmore sent the IRS a $493,526 check as payment for his 2013 taxes despite having no more than $2,500 in his personal bank account at the time. Gilmore’s check bounced and he never resubmitted payment in lieu of the bounced check. From November 2014, when he was notified by the IRS concerning the bounced check, to the end of December 2014, Gilmore spent more than $80,000 toward the construction of his home and to purchase artwork, antiques and collectibles and more than $25,000 in mortgages and related expenses for five real estate properties he owned;
• From November 2014 to October 2015, Gilmore falsely represented to the IRS collections officer that he would make partial payments to the IRS for his outstanding tax liability, but made none;
• Gilmore allegedly filed false tax returns for 2013 and 2014, which under reported his actual income from the law firm.
According to the U.S Attorney’s Office, Gilmore exercised significant control over the law firm’s financial affairs.
Officials allege Gilmore was a person responsible for withholding payroll taxes from the gross salary and wages of the law firm’s employees to cover individual income, Social Security and Medicare tax obligations.
For the tax quarters of March 31, 2016, to June 30, 2016, the law firm allegedly withheld tax payments from its employees’ checks, but Gilmore failed to pay over in full the payroll taxes due to the IRS
The U.S. Attorney’s Office said the tax evasion count and the two counts of failing to collect, account for, and pay over payroll taxes each carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
The two counts of filing a false tax return each carry a maximum penalty of three years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The count alleging loan application fraud carries a maximum penalty of 30 years in prison and a $1 million fine. Officials said Gilmore will be arraigned at a later date.
Township Business Administrator Don Guardian said Toms River does not employ Gilmore & Monahan for legal services.
