Twelve years after beginning to secretly help the government in a covert tax evasion investigation, a Monsey man has been ordered to forfeit $3.8 million for his own tax crimes.
U.S. District Judge Cathy Seibel also ordered Eli Katz to forfeit a men’s Rolex watch, a women’s Ebel watch, and a one kilogram gold brick, on April 7 in White Plains federal court, and sentenced him to one year of supervised release for tax evasion and mail fraud.
Katz was originally charged in 2013 and released from custody on posting a $500,000 appearance bond. But for more than 11 years his case was kept out of the public eye, by creating a John Doe docket and sealing all case records.
While Katz was helping the government, he was allowed to travel widely, according to now-public docket entries, including U.S. trips to California and Florida and foreign trips to Canada, Hungary, Iceland, Israel, Poland, Spain, Switzerland, and Ukraine.
Even when Katz pleaded guilty in November 2023, the courtroom and the transcript of the proceeding were sealed, according to a now-public docket entry.
“This court finds that if this proceeding was public and made known to interested parties,” Judge Seibel noted, “it could significantly prejudice the integrity of the ongoing undercover investigation.”
Then, at the request of prosecutors who said the investigation was completed and the targets were aware of Katz’s cooperation, the docket was unsealed.
From 2005 to 2011, according to the charging papers, Katz had failed to report $23 million in income he received from operating Katzco Motor Vehicle Service Ltd. in Monsey.
A June 17, 2024 docket entry identifies the target of the covert investigation as Joseph Neumann, then 83, of Monsey.
Neumann was arrested in 2019 and accused of underreporting $3.6 million in personal income from 2015 to 2018, saving himself about $1.25 million in federal taxes. He also was accused of trying to launder $6 million for clients, in exchange for 10% fees.
Although sentencing guidelines called for up to 41 months in prison, the sentencing judge agreed with defense attorneys, prosecutors, and U.S. Probation Office that Neumann should not be incarcerated because of his rapidly declining health. He was sentenced in June 2024 to two years of supervision and ordered to pay the IRS nearly $1.3 million.
