A 70-year-old Lake Norman lawyer illegally spent about $300,000 from his law firm on plastic surgery, luxury cars and a boat, federal prosecutors said Friday.
John Francis Hanzel of Cornelius pleaded guilty in U.S. District Court in Charlotte on Friday to filing a false tax return. He faces up to three years in prison, according to a news release by U.S. Attorney Andrew Murray’s Office.
Hanzel declined comment when the Observer reached him by phone Saturday.
According to an indictment and other court records, Hanzel lacked a personal bank account and never paid himself a salary from his law firm, John F. Hanzel, P.A. He instead wrote checks from his law firm account to pay his mortgage, utility and credit card bills and other personal expenses, records show.
Hanzel fraudulently deducted those and other personal expenses as business expenses, IRS investigators and federal prosecutors said in the indictment. He falsely listed the expenses “as costs of goods sold and other deductions,” according to the U.S. Attorney’s Office news release.
Court records show that from 2011 to 2015, Hanzel reported “minimal income” on his federal individual income tax returns — Forms 1040. He fraudulently reported total income of less than $73,000 over the four years, thereby paying less than $5,500 in federal income tax over the period, according to the indictment.
“Hanzel actually received substantial income that he hid from the IRS by falsely deducting personal expenses as business expenses and by living out of his business bank account,” according to the U.S. Attorney’s Office news release.
He spent at least $297,000 over the four years on luxury vehicles and a boat, jewelry and plastic surgery, court records show.
The tax loss from Hanzel’s fraudulent tax return filings totaled up to $250,000, according to court documents.
Hanzel is free pending his sentencing, which has yet to be scheduled, prosecutors said.
Hanzel had his law license removed over the summer as his criminal case continued in the courts, North Carolina Bar records show.