GREENBELT — Long-time Baltimore criminal defense attorney Stanley Needleman answered every question in a firm, strong voice as he pleaded guilty to tax offenses Thursday in U.S. District Court in Greenbelt.
But his body language suggested a man in distress and he admitted as much when Judge Alexander Williams Jr. asked how he was doing.
“Physically, I’m fine,” Needleman said. “Mentally, I’m disturbed.”
After pleading guilty to tax evasion and structuring bank deposits to hide income, Needleman could face between 30 and 46 months of prison time under the deal he made with prosecutors. He also agreed to forfeit $1.15 million in cash that federal agents found in two basement safes when they raided his Pikesville home on April 14.
But he said what was really weighing on him was that after 40 years of practice, he was no longer a lawyer.
“This event, your honor, since April 14 — you know I had to resign from the bar association,” Needleman said. “So this bothers me.”
The plea agreement outlines a multiyear effort by Needleman, 68, to hide income from the Internal Revenue Service by hoarding cash and depositing it in the personal account in increments less than $10,000 to circumvent federal bank reporting requirements.
As a business owner, Needleman’s taxes were determined by deposits into his firm’s account. But his clients often paid in cash — as much as $30,000 for defending a felony drug charge in federal court — and Needleman was the one who took the envelope full of cash home every night and brought it back to the office empty the next morning.
He was ostensibly depositing the money into the firm’s account, but the plea agreement states that he kept much of it at home — enough to avoid at least $543,695 in federal taxes and $117,319 in state taxes between 2005 and 2010. Under the agreement, those amounts will be paid from the cash recovered from his home and he will forfeit the rest.
Federal prosecutor Sandra Wilkinson said the Internal Revenue Service may still sue for penalties and interest.
“The parties have reached an agreement on criminal restitution, but have not reached an agreement on the civil aspects of the case,” she said.
Needleman agreed to all that Thursday. But the subtext of the hearing suggested that he did so reluctantly.
Dressed in a navy blue suit and bow tie, Needleman spent much of the hearing with his hands on his forehead. He halted the proceedings time after time to consult with his attorneys, Kenneth W. Ravenell and Milin Chun of Murphy PA.
When Williams asked him to confirm that no one had pressured him to make the plea deal, Needleman let the silence hang for several seconds before answering, “Yes sir.”
After Wilkinson read the facts of the case, Williams asked Needleman if he agreed with them. Needleman said he had no doubt that the government could call witnesses who would corroborate those facts — but fell short of confirming them himself.
That seemed to irritate the judge.
“You either agree to these facts or you don’t,” Williams said. “If you don’t agree to them, I’m not going to allow a guilty plea.”
Needleman then said he agreed. He declined to comment after the hearing.
“This is just a difficult time for Mr. Needleman, with what he’s going through,” Ravenell said. “He has to sit in court as a defendant where he often sat as an attorney, so it’s obviously a trying time for him.”
U.S. Attorney Rod Rosenstein said he understands it’s difficult to admit guilt, but the facts were clear.
Federal agents from the Drug Enforcement Agency and IRS interviewed Needleman’s clients and found they’d paid him far more than his bank statements suggested, Rosenstein said.
Prosecutions of illegal bank-deposit structuring are on the rise, he added, and he hopes Needleman’s case will serve as a deterrent to professionals who are paid in cash.
“Anybody who engages in misconduct will be prosecuted, no matter what line of work they’re in,” he said.
Williams was filling in for Judge Roger W. Titus, who was in the hospital for knee surgery. The case was moved to Greenbelt after all the federal judges in Baltimore recused themselves because, Rosenstein said, they knew Needleman personally.
Ravenell said he hoped Titus would take into account the entirety of Needleman’s life during his sentencing, scheduled for Dec. 15.
“For 40 years Mr. Needleman has been a great attorney who has helped many people,” Ravenell said. “Obviously in this case he’s made a mistake and he’s been a man and admitted to that mistake.”