The Friars Club is a private institution in Manhattan, New York known for uproarious roasts and celebrity events for its members who are well-known in the entertainment industry. (Famous members include the likes of Frank Sinatra, Jack Benny and Lucille Ball as well as current entertainers such as Jack Black, Jerry Seinfeld and Whoopi Goldberg.) Today’s fraud article focuses on the club’s executive director, who was recently convicted for tax fraud. At a time when the private club was under pressure to pay vendors, the executive failed to report roughly $433,000 in compensation received over a four-year period on his personal tax returns.
Today’s fraud article states that the Friars Club director’s unreported compensation included personal loans worth $160,000. (Apparently, his employer agreed to forgive multiple loans the club had given to the director, even though the club was having cash management issues.) The loans were used for personal expenses such as wine, international travel for himself and his family members, clothing and groceries. (Even those who rub shoulders with celebrities must pay the bills to keep up their image, right?)
While in court, the New Yorker’s lawyer praised the role his client played in revitalizing the legendary private club, but also stated that the executive director accepted responsibility for his role in the tax fraud scheme. The executive director pleaded guilty to filing false income tax returns and agreed to repay $156,920 to the Internal Revenue Service (IRS). He is also facing a maximum of three years behind bars. (That’s certainly no laughing matter.)
It’s important to note that the Friars Club has not been accused of any wrongdoing. While the defendant’s lawyer noted the significant contributions that he has made over the years, you could say this fraud conviction is very telling. (If he can’t be trusted to accurately report his own personal income, it makes you wonder if he had a role in the financial struggles at the famed club.) You could say the Manhattan club director got roasted in court. (And, it looks like the IRS is going to have the last laugh.)
Today’s “Fraud of the Day” is based on an article entitled, “Friars Club Director Pleads Guilty to Tax Fraud,” published by The New York Times on January 8, 2019.
The executive director of the Friars Club, a Manhattan institution long known for its celebrity roasts and as a hangout for entertainers like Frank Sinatra and Jack Benny, pleaded guilty on Tuesday to having filed false income tax returns.
Prosecutors said the director, Michael Gyure, failed to report roughly $433,000 in compensation between 2012 and 2016. That included reimbursements and payments he used for personal expenses including wine, international travel for himself and family members, clothing and groceries.