A West Los Angeles man who earned more than $3 million over a three-year period while working in Dubai was sentenced Wednesday to six months each of home detention and community service and was ordered to pay about $933,000 in restitution for failing to report the foreign income to the Internal Revenue Service.
Fallah Alfallah, 50, pleaded guilty to a federal tax evasion charge last October, and has already paid about 30 percent of his restitution to the IRS, said U.S. District Judge Dolly M. Gee, who also sentenced the defendant to three years of probation and ordered an additional $25,000 fine due in 90 days.
“Having a felony in one’s record is a substantial scarlet letter he will bear for the rest of his life,” the judge said from the bench in downtown Los Angeles.
Kuwait-born Alfallah, a naturalized U.S. citizen, lived in Dubai from 2008 through 2010 while working as an investment advisor for the Bahrain-based Unicorn Investment Bank. Although he earned more than $3 million and despite being advised by his tax preparer that he had a legal obligation to report his overseas income to the IRS, Alfallah did not file income tax returns with the IRS, according to federal prosecutors.
Alfallah admitted that he intended to avoid paying taxes on this income and took affirmative steps to evade the tax due for the three years. As a result of Alfallah’s conduct, the government sustained losses of more than $933,000, according to Assistant U.S. Attorney Robert F. Conte.
“If you take steps to conceal foreign income from the IRS, there are consequences,” Conte told the court, adding that the “integrity of the tax system” depends upon people being aware of the penalties for tax evasion.
Alfallah, who runs an investment company, apologized to the court, saying he was “truly sorry for putting my family through this.”
The judge also ordered that Alfallah not have any foreign bank accounts in his name or the name of any business he operates during the period of supervised release.