A Rockland accountant who could have been put in prison for 130 years for conspiracy, bank fraud and tax evasion has been sentenced instead to no imprisonment for helping the feds prosecute several scams.
U.S. District Judge Cathy Seibel also ordered Stephen Strauhs, 70, of Blauvelt, to pay $110,501 in restitution, April 3 in federal court, White Plains.
“Strauhs provided extraordinary cooperation for years,” assistant prosecutors stated in a March 22 letter to the judge, “that significantly advanced the investigation and prosecution of a wide range of sophisticated fraudulent conduct committed by multiple defendants.”
For nine years, he recorded hundreds of meeting and phone conversations at the direction of the FBI and regularly met with agents for debriefings. His “cooperation” began shortly after the FBI searched his home office in 2012.
Strauhs was formally charged with and pled guilty in 2019 to conspiracy to commit bank fraud, bank fraud, conspiracy to defraud the IRS and tax evasion from 2006 through 2012. He was released from custody and did not have to post a bond.
Most of the charges concern actions taken on behalf of clients, but according to court records he applied some of the same techniques to lowering his own tax bill. He included non-deductible personal expenses as business expenses, for instance, and under-reported business income.
From 2008 through 2011 his business had taxable income of $405,608 but he reported $100,400. He owed the IRS $68,001 but paid $9,065.
But prosecutors were interested in bigger fish.
Participants in the Rubin Organization, for example, were charged in 2014 in a mortgage fraud scheme that reportedly netted $20 million.
The scheme was led by Yehuda Rubin, of Kiryas Joel, Orange County, and Irving Rubin, of Brooklyn. Family members inflated their incomes and assets to obtain bank loans, according to court records, used the money for personal debts and real estate projects, and defaulted on the loans.
Strauhs helped further some of the frauds by preparing false documents that were submitted to banks to obtain loans.
Several defendants pled guilty and were sentenced to prison, including Yehuda Rubin for 18 months and Irving Rubin for six months.
Strauhs helped the FBI catch Arnold Klein and Leon Klein in a money laundering scheme. Arnold Klein, of Kiryas Joel, skimmed commissions on money he laundered through a religious charity for clients.
Strauhs gave Arnold Klein four checks totaling $280,000 from a purported health care fraud, payable to a nonprofit religious loan society controlled by Klein. The checks were actually provided by the FBI.
Klein pleaded guilty to money laundering and was sentenced in 2021 to six months in prison.
In 2010, Mehdi and Saaed Moslem hired Strauhs to provide tax and accounting services for their used car dealership, Exclusive Motor Sports, in Central Valley, Orange County.
The father-son partners directed Strauhs to conceal business income, inflate their net worth and fabricate tax returns to obtain bank loans.
From 2010 through 2011, the Moslems under-reported their incomes by more than $2.4 million and their tax obligations by $794,111, according to court records.
In 2021, after nearly three weeks of trial, a jury found the Moslems guilty of conspiracy to defraud the IRS, conspiracy to commit bank fraud, and other charges.
Mehdi Moslem was sentenced to 40 months and Saaed to 96 months in prison.
“It is difficult to overstate the significance and usefulness of Strauhs’s cooperation dating back to 2012, assistant prosecutors Nicholas S. Bradley and James McMahon stated in their sentencing letter to judge Seibel.
In the Moslem case, “the sheer number of recordings over the years that backed up Strauhs’s testimony made it nearly impossible for defense counsel to undermine Strauhs’s credibility during cross-examination and summation.”
