Former Certified Public Accountant Pleads Guilty to Tax Evasion

DETROIT - A Walled Lake resident and former Certified Public Accountant pleaded guilty today to evading approximately $318,000 in federal income taxes, United States Attorney Dawn N. Ison announced.

Ison was joined in the announcement by Special Agent in Charge Charles Miller of the Internal Revenue Service-Criminal Investigations Detroit Field Office.

Paul Kozowicz, 75, pleaded guilty to one count of tax evasion. Kozowicz's guilty plea arose out a scheme that, according to court papers, resulted in his intentional failure to report over 1.1 million dollars in taxable income to the Internal Revenue Service over a nine-year period.

According to the plea agreement, between approximately 2002 and 2011, Kozowicz worked as a full-time salaried employee providing accounting and financial services for a law firm in Birmingham, Michigan. In 2011, that firm reorganized, and Kozowicz became a part-time employee of the firm, making approximately 20% of his previous salary. To replace his lost income, Kozowicz became an independent contractor and provided accounting and consulting services to several other businesses.

Kozowicz formed a corporation called "FACS, Inc.," which purported to be the entity that provided these accounting and consulting services. Kozowicz opened a bank account in the name of FACS, and Kozowicz's customers deposited their payments for Kozowicz's services into that account. However, Kozowicz did not declare any of the income he earned using the name FACS on any individual or corporate tax return between 2011 and 2019. Moreover, Kozowicz did not maintain any corporate books or records for FACS, nor did he observe or respect any other corporate formalities such as the State of Michigan's annual corporate filing requirements.

In addition, according to the plea agreement, Kozowicz treated the monies deposited in the FACS account as his own, and used those monies freely for personal expenses and needs. Yet on his personal federal income tax returns the only income Kozowicz declared was his reduced law-firm salary and certain taxable social security receipts. FACS never filed a corporate tax return. Kozowicz further admitted that between 2011 and 2019, he earned approximately $1.15 million in unreported income through FACS and evaded payment of approximately $318,243 in tax due and owing on that income.

"Paul Kozowicz chose to enrich himself at the expense of the public by willfully concealing over a million dollars in taxable income from the IRS. As a financial professional, Kozowicz knew better. My office takes seriously anyone who evades their obligation to pay taxes, and today's conviction reflects our commitment to identify and prosecute such offenders," stated U.S. Attorney Ison.

"The license to run a business is not a license to avoid paying taxes," said IRS Criminal Investigation, Detroit Field Office, Special Agent in Charge Charles Miller. "Paul Kozowicz's blatant fraud, hiding income, and having his shell business pay his purely personal expenses, cheated all Americans, since we all pay our fair share for the government services and protections that we enjoy. CI remains dedicated to holding those accountable that refuse to play by the rules."

Sentencing is set for January 21, 2025 before United States District Judge Stephen J. Murphy III. Kozowicz faces a maximum sentence of five years imprisonment. He will be obligated to pay restitution of $318,243 to the IRS after sentencing.

The case is being prosecuted by Assistant United States Attorney John K. Neal. The investigation is being conducted by the Internal Revenue Service-Criminal Investigations Office.