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Moshe Lax Faces $62M Fraud Lawsuit

Aug 20, 2018 5:02 AM   By Rapaport News
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RAPAPORT... The US Department of Justice (DOJ) is suing diamond and jewelry heir Moshe Lax, Ivanka Trump’s friend and former business partner, for tax fraud.

Lax (pictured) and several of his family members sought to hide earnings from his late father’s trust in a series of “sham transactions” and “fraudulent transfers” designed to evade tax liability, the suit alleges.

Members of the Lax family owe $61.6 million to the Internal Revenue Service (IRS), including income tax on revenue from various diamond businesses, according to court documents. Those businesses include Dynamic Diamond Corp., Favorite Diamond and Madison Avenue Diamond Holdings, the company Lax operated with Ivanka Trump under the brand name Ivanka Trump Fine Jewelry.

Lax and his sister, Zlaty Schwartz, co-executors of their father’s estate, fashioned as many as 10 schemes, according to legal documents, in order to hide the family’s assets from creditors, including the government. These schemes included creating holding companies to which funds were transferred, and changing the name of one of their diamond companies without applying for a tax identification number for the new company.

The DOJ made the allegations in documents filed in a New York district court last month.

Lax has a long history of working with Ivanka Trump. He operated a licensing deal enabling him to use her name in association with jewelry, and helped her open a retail location in Manhattan’s Upper East Side in 2007, according to the New York Times. The two remained partners for some time: Until 2017, Lax’s LinkedIn profile listed him as the chairman of Ivanka Trump Fine Jewelry, according to Politico. While the lawsuit mentions Madison Avenue Diamond Holdings, the business Lax operated in partnership with Trump, it does not name her as a party to any wrongdoing.

Attempts to reach Lax for comment, as well as the lawyer representing Schwartz, were unsuccessful.
Tags: DOJ, Dynamic Diamond Corp, Favorite Diamond, Internal Revenue Service, IRS, Ivanka Trump, Ivanka Trump Fine Jewelry, Kostelanetz & Fink, Lax, Madison Avenue Diamond Holdings, Megan Brackney, Moshe Lax, Rapaport News, US Department of Justice, Zlaty Schwartz
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