15 Celebrities Convicted for Tax Evasion
Just because celebrities are rich and famous doesn't mean life is always glamorous for them. In fact, many members of the Hollywood elite have endured serious tax troubles. And while celebrities aren't necessarily more likely to break the law than their fans, they do have a far greater likelihood of being audited. Here are 15 celebrities that committed tax evasion — and got caught.
Just because celebrities are rich and famous doesn't mean life is always glamorous for them. In fact, many members of the Hollywood elite have endured serious tax troubles. And while celebrities aren't necessarily more likely to break the law than their fans, they do have a far greater likelihood of being audited. Here are 15 celebrities that committed tax evasion — and got caught.
Read: 7 Tax Strategies the Rich Don't Want You to Know About
1. Stephen Baldwin
In March 2013, actor Stephen Baldwin pleaded guilty to not paying New York state income taxes in 2008, 2009 and 2010, totaling $400,000. Baldwin narrowly avoided jail time and was given one year to pay the debt back in full. Repayment of his debt meant his record would be wiped clean.
Baldwin told reporters he never intended to avoid paying taxes, and that he had received bad advice from lawyers and accountants. He was able to satisfy his debt in full before his deadline.
This wasn't the end of Baldwin's tax troubles, however. TMZ reported in September 2015 that he owed $90,000 in back taxes again — $30,000 to New York and $60,000 to the federal government.
2. Nicolas Cage
Nicolas Cage racked up a $13.3 million tax debt after failing to pay his debts to the IRS in 2002, 2003, 2004, 2007 and 2008. The actor blamed his former business manager for the mishap, claiming he was not aware of the situation.
"Over the course of my career I have paid at least $70 million in taxes," Cage said in a statement to TMZ. "Unfortunately, due to a recent legal situation, another approximate $14 million is owed to the IRS, however, I am under new business management and am happy to say that I am current for 2009. All taxes will be paid including any to be determined state taxes."
At the end of 2008, the federal government placed a tax lien on the actor's real estate holdings. In April 2012, Cage paid $6.25 million toward his tax debts and another $600,000 in November 2012, but he reportedly still has more to pay.
3. Heidi Fleiss
In 1997, the former "Hollywood Madam" was sentenced to 37 months in prison for tax evasion and money laundering. The judge went easy on Heidi Fleiss, imposing a prison term much less than the maximum suggested punishment of 78 to 97 months. Fleiss ultimately served 20 months in prison and was released to a halfway house to complete her term.
Her punishment also included 300 hours of community service, three years of supervised release, a $400 fine and mandatory attendance at a substance abuse program.
4. Joe Francis
The "Girls Gone Wild" founder was convicted of tax evasion in 2009. Joe Francis pleaded guilty to filing false tax returns — where he withheld $500,000 in interest income — and for giving jail workers up to $5,000 in goods in exchange for food.
Francis was ordered to pay nearly $250,000 in restitution to the IRS. He was sentenced to 301 days already served and one year of probation.
5. Dolce and Gabbana
Designers Domenico Dolce and Stefano Gabbana were entangled in a tax nightmare dating back to 2007, before they were eventually vindicated in October 2014. In June 2013, the duo was convicted of failing to file tax returns for their company in Italy. Prosecutors claimed the designers owed approximately $50.7 million for 2004 and 2005 as a result of the 2004 sale of the company's main brands to Luxembourg-based Gado.
Before Italy's high court found Dolce and Gabbana not guilty of tax evasion, two lower courts had found the high-end designers guilty of tax evasion and had imposed 18-month jail terms. Prosecutors had been pushing for three-year jail sentences, accusing the two of running a "sophisticated tax fraud" operation by using Gado as a shell to avoid paying taxes. In an unexpected turn of events, another prosecutor argued during a March 2014 appeal that Gado was in fact a real company.
6. Teresa and Joe Giudice
In July 2013, Teresa and Joe Giudice were indicted on 39 counts of fraud and tax charges. Among the host of allegations was a charge aimed at Joe for failing to file tax returns from 2004 to 2008 — a four-year period during which he earned a total of $1 million. A few months later, in November 2013, the "Real Housewives of New Jersey" stars were charged with an additional two counts.
Teresa failed to disclose her full salary from the hit Bravo reality show and lied under oath about the income she received from other business ventures. Like his wife, Joe also lied under oath about failing to file his tax returns. The Giudices initially pleaded not guilty when they were charged in the summer of 2013, but ultimately changed their plea to guilty in March 2014.
In total, Teresa pleaded guilty to four counts and Joe pleaded guilty to five counts — including not filing his tax returns. In October 2015, U.S. District Court Judge Esther Salas sentenced Teresa to 15 months in prison and Joe to 41 months in prison. The couple was ordered to pay $414,588 in restitution.
Judge Salas allowed the couple to stagger their sentences so their four young daughters would have one parent at home. Teresa's prison sentence began on Jan. 5, 2015 and she was released on Jan. 11, 2016. Joe will start his sentence in a few months and, as he is not a U.S. citizen, might face deportation after he is done serving his time.
7. Leona Helmsley
The billionaire hotel magnate whose entitled personality earned her the nickname "the queen of mean," was convicted of evading $1.2 million in taxes in 1988. Leona Helmsley was sentenced to four years in prison and 750 hours of community service — ultimately serving a total of 21 months.
After learning that Helmsley had her employees perform some of her community service chores, the judge added 150 additional hours of community service. Helmsley was famously quoted as saying, "Only little people pay taxes."
8. Lauryn Hill
In 2013, Lauryn Hill spent three months in prison for tax evasion after failing to pay more than $1 million in taxes over a decade. The singer pleaded guilty to the charges in June 2012, admitting to not paying taxes on $1.8 million in earnings from 2005 to 2007. Her three month sentence also included unpaid state and federal taxes from 2008 and 2009, which brought her total tax debt to approximately $2.3 million.
The former member of the band The Fugees told the judge she had intended to pay her tax bill eventually, but didn't have the money after leaving the music business. Hill was ultimately released from prison several days early and given one year of probation, which included three months of home confinement. But Hill's tax troubles weren't yet behind her, as nearly six months later she was hit with seven tax liens from 2005 to 2011, totaling nearly $867,000.
9. Fat Joe
In August 2013, Joseph Cartagena, better known as the rapper Fat Joe, turned himself in to serve a four month sentence for tax evasion. Fat Joe had pleaded guilty in December 2012 for skimping out on taxes in 2007 and 2008, resulting in over a $1 million tax bill. The rapper was released early on Thanksgiving Day but was ordered to pay a $15,000 fine and undergo one year of supervision.
10. Willie Nelson
In 1990, legendary country singer Willie Nelson was hit with a $32 million bill in back taxes from the IRS. The government agreed to reduce his debt by nearly $15 million — bringing the grand total to $17 million — but he still didn't have the money to pay it. Consequently, the IRS seized almost all of his assets, leaving him with a remaining $15 million tax bill.
As a way to get their money, the IRS got creative and allowed Nelson to record the album "Who'll Buy My Memories? (The I.R.S. Tapes)" to raise funds. Under the arrangement, Nelson had to sell four million copies of the album to erase his debt. In 1993, Nelson successfully paid off his tax bill.
11. Pete Rose
Disgraced former baseball hero Pete Rose was convicted of tax evasion in 1990, sentenced to five months in jail and fined $50,000 after failing to report more than $354,000 in income from baseball memorabilia sales, autograph signings and gambling. Rose was also ordered to spend three months in a halfway house and perform 1,000 hours of community service after serving his time.
In 2004, he was hit with a tax lien for almost $1 million in back taxes. After paying the nearly $974,000 bill in 2011, he found himself on the hook again for unpaid taxes in 2009 and 2010 — this time for a total of $120,643.41.
12. Ja Rule
In March 2011, rapper Ja Rule — whose real name is Jeffrey Atkins — pleaded guilty to failing to file tax returns and agreed to pay more than $1.1 million in back taxes. In total, Ja Rule pleaded guilty to three counts of failing to file a tax return, from 2004 to 2008, despite the fact that he was earning an income during this time period.
The rapper was sentenced to 28 months in jail for attempted illegal gun possession and tax evasion. Ja Rule began his prison sentence in June 2011 and was released early in May 2013. He spent the final two months of his sentence in home confinement.
13. Wesley Snipes
In 2008, Wesley Snipes was convicted on three misdemeanor counts of failing to file tax returns from 1999 to 2001. The actor kept a total of $7 million in taxes from the federal government during this time period.
After losing an appeal for a retrial in 2010, he was sentenced to three years in a Pennsylvania prison for white-collar offenders. Snipes was released from prison on April 2, 2013 and finished the final three and a half months of his sentence in home confinement.
14. Darryl Strawberry
In 1994, Darryl Strawberry and his agent were indicted on federal tax evasion charges, claiming the troubled baseball star failed to report more than $500,000 in earned income from 1986 to 1990. The pair pleaded innocent to the charges, but in 1995, Strawberry was sentenced to six months of house arrest and ordered to pay $350,000 in back taxes.
Because Strawberry still owed back taxes for 1989, 1990, 2003 and 2004, the IRS seized his retirement annuity from the New York Mets in 2014. It was auctioned off for $1.3 million in 2015.
15. H. Ty Warner
Beanie Babies creator and founder of Ty Warner Hotels & Resorts, H. Ty Warner, was convicted of tax evasion in January 2014. Warner — who has a net worth of approximately $1.7 billion — failed to report $24.4 million in gross income to the IRS from 1999 to 2007.
According to his attorneys, Warner paid a civil penalty of $53 million and filed amended tax returns for each year from 1999 to 2008. Prosecutors said he also paid $14 million in back taxes and interest. Despite multiple attempts by prosecutors to make Warner serve jail time, a three judge 7th Circuit Court of Appeals panel ruled in July 2015 that he wouldn't spend time behind bars.
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15 Celebrities Convicted for Tax Evasion
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