A Beverly Hills businessman will not serve prison time for attempting to hide $4 million in unreported profits in offshore accounts, a federal judge ruled Monday, citing the defendant's cooperation with prosecutors.
Zvi Sperling, of Beverly Hills, was instead sentenced to two years of probation, including 1,200 hours of community service, plus fines and penalties, by U.S. District Judge John F. Walter.
Walter also ordered Sperling to provide training and employment for at least six disabled veterans at a wholesale lighting company the defendant co owns in the City of Industry.
The judge said that if not for the "substantial assistance" Sperling provided to government prosecutors, the result would likely have been "a substantial prison sentence."
Sperling, 62, pleaded guilty in March to a single count of conspiracy to defraud the government and admitted that he maintained undeclared accounts at two Tel Aviv-based banks. He also acknowledged that from 2003 to 2010, he failed to report to the Internal Revenue Service interest income of nearly $400,000.
Walter said Sperling was always able to pay his taxes, adding that he had difficulty understanding why "wealthy, successful, intelligent individuals" like the defendant would cheat a country that allowed the acquisition of so much.
Answering his own question, the judge said motivators for offshore tax evasion apparently include "simple greed," a view of the federal tax system as a "game," and defendants' sense that they are "above the law."
Walter said that if Sperling had not been caught, he likely would have "cheated the government indefinitely."
However, once he was charged in February, Sperling felt "deeply remorseful for his criminal conduct" and fully cooperated with prosecutors, the judge said.
As part of his plea agreement, Sperling agreed to pay back taxes and civil penalties, including a Foreign Bank and Financial Accounts penalty of half of the highest amount of his undeclared accounts from 2006 to 2011.
Sperling has already paid more than $1 million in civil penalties and $70,000 in restitution, Walter said. The judge also ordered the immediate payment of a $30,000 fine.
Sperling, who was born and raised in Tel Aviv, moved to the United States to attend school, according to his plea agreement. He later became a U.S. citizen and joined his brother in forming Maxim Lighting, which sells its products throughout the U.S. and has an office in China, according to the company's website.