Unsuccessful Mental Break: Florida Psychiatrist Convicted of Disability Fraud and Tax Evasion

psychiatristWe all need the occasional break from work, but falsely claiming disability might not be the best way to get it. Last month, a south Florida doctor was sentenced to prison for disability fraud and tax evasion on over $1.6 million in income earned.


From the Department of Justice Press Release:

According to court documents and information provided to the court, Arthur John Kranz was a doctor specializing in psychiatry. Beginning in 2002, Kranz made a claim on his private disability policy that he was unable to work, and began receiving disability payments from his insurance company. In December 2003, Kranz submitted an application to the Social Security Administration (SSA) for disability benefits The SSA approved his application. Kranz then began receiving SSA disability payments, in addition to the private disability insurance payments. Because of the disability payments, Kranz was required to notify his insurance company and the SSA if he returned to work.


From January 2006 to March 2013, Kranz worked as a psychiatrist at a hospital in Pennsylvania and earned over $1.6 million in income. Kranz did not report his employment to either the SSA or his insurance company. Rather, in order to continue collecting disability benefits, Kranz took steps to conceal his income from the insurance company, the SSA, and the Internal Revenue Service (IRS). He directed that his income be paid to nominee individuals and sham corporations he had created to receive his payments. Kranz also filed false personal tax returns that did not report the income from his work as a psychiatrist, and provided fraudulent documentation to his insurance company that falsely stated that he was not working. 


In addition to the term of imprisonment imposed, Kranz was ordered to serve three years of supervised release and pay restitution of $1,013,284.


Skilled tax defense if you face an criminal tax investigation

Anyone who believes they might one day face allegations that they falsely claimed disability, failed to pay taxes or engaged in tax fraud, should contact tax law attorneys to discuss their circumstances and available legal options. The attorneys at Robert J. Fedor, Esq., L.L.C. represent clients across the nation who face these accusations and other serious charges. Contact us online or call us at 800-579-0997 today.


Download Our IRS Criminal Tax Fraud eBook