Lawyer pleads guilty in tax fraud
By SAM WOOD (Philadelphia Inquirer Staff Writer)
Published: July 6, 2009
A prominent Lehigh Valley attorney admitted in U.S. District Court today that he understated his income by $5 million, evading $1.9 million in taxes.
John Peter Karoly Jr, 59, had been scheduled to go to trial today for willfully filing false tax returns to the IRS.
In return for his guilty plea, the U.S. Attorney’s office dismissed charges that Karoly schemed to defraud the estate of his brother and sister-in-law by creating phony wills after the couple was killed in a plane crash.
Prosecutors also agreed to drop charges against Karoly’s son, J.P. Karoly III, and Dr. John J. Shane, for their alleged roles in creating the phony wills. In addition, Karoly agreed to renounce any interest he had in the 2006 wills and agreed to pay $1,955,395 to the IRS in restitution.
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