Rapper DMX Arrested For Tax Fraud
Federal attorney Joon H. Kim said that DMX failed to give the IRS approximately $1.7 million in owed taxes between the years 2002 and 2005. In addition, some years the rap mogul didn’t file income taxes at all.
DMX, whose real name is Earl Simmons, faces 14 different charges all related to financial fraud. Prosecutors say in addition to tax fraud, DMX falsified information on bankruptcy filing documents. Despite owing millions in taxes, bankruptcy documents reveal DMX’s claims that he made just $10,000 in an entire year. Federal officials say they’ve been chasing the money since 2005. They say matters got worse when DMX allegedly failed to file income tax returns for the years 2010 through 2015.
Officials say the rapper schemed to conduct business in cash as much as possible. They also say he used the bank accounts of managers and other confidants in order to pay personal expenses. DMX could spend up to 44 years in federal prison if he’s convicted on all of the charges.
Section 7201 of the United States Code chapter 26 covers basic tax evasion. If a person willfully uses any method or manner in order to avoid taxes, they’re guilty of a felony. A person that’s convicted can spend up to 5 years in prison for each offense and owe a fine of $100,000 in addition to their unpaid tax burden. In order to be guilty, the federal prosecutor must show that the person responsible knows they’re acting in a way that avoids fair payment of taxes. If the payer honestly thinks that their actions are a legal way to reduce their tax bill, it’s not a violation of federal law.
DMX faces one count of 26 U.S.C. 7201, evasion of income tax payment. The charges against DMX also include a separate count of trying to obstruct U.S. tax laws which is punishable by up to three years in prison. He faces six charges of evading income tax liability assessments, and these charges bring up to five years in prison each. Finally, he faces six counts of not filing an income tax return. Each of these counts brings up to one year in prison.
The charges are pending in the United States District Court for the Southern District of New York. The formal charges relay DMX’s professional success beginning in 1997. They talk about millions of sales, success on the charts and platinum status for multiple records. The charges then list unpaid tax liabilities from $260,000 in some years to more than $600,000 in others. The charges allege that DMX directed others to divert royalty income to accounts that weren’t in his name, so that he could receive money in cash.
It’s unlikely that a judge would sentence DMX to the maximum, but it’s a possibility. If DMX pleads guilty or is convicted of the charges by a judge or jury, the judge could sentence him to a period of incarceration in addition to ordering fines, restitution and the costs of prosecution. DMX pleaded not guilty, and he is free on a hefty $500,000 bond as he awaits further proceedings. There’s no word on whether federal prosecutors plan to enter into plea negotiations with the rapper.