Former defense contractor Douglas Edelman, 73, has admitted to a series of tax crimes, in a case that has shed light on a complex effort to deceive the United States government. The guilty plea, which includes 10 felony counts, was announced yesterday, entailing a conspiracy to defraud the U.S., seven counts of tax evasion, and two counts of making a false statement. Edelman's sentencing hearing is currently set for Nov. 17, 2026, and a trial regarding other charges will occur that same year.
According to the U.S. Attorney's Office, Edelman, who co-founded Mina Corp. and Red Star Enterprises, earned more than $7 billion from U.S. Department of Defense contracts. He orchestrated a prolonged plan to conceal profits and thereby evade U.S. taxes by using undisclosed foreign bank accounts and creating falsified documents. In one instance, when his company prospered in 2005, Edelman began distributing profits to Swiss bank accounts, using other companies he owned, which was significant considering the companies' defense contracts supported U.S.post-9/11 efforts in Afghanistan and the Middle East.
Edelman's deft maneuvers came to a head during a 2010 investigation by the Subcommittee on National Security and Foreign Affairs, which questioned the ownership of Mina/Red Star amidst corruption allegations. Instead of declaring his ownership, Edelman fueled a fabricated narrative to Congress, defended by fraudulent paperwork, claiming a French citizen without U.S. tax obligations was the owner. This scheme continued across various government departments and even during IRS Voluntary Disclosure Program applications in 2016, where Edelman reported his income from untruthful sources.
The case, detailed by the District of Columbia's prosecution teams and IRS-CI's International Tax & Financial Crimes group, paints a stark picture of Edelman's lavish expenditures, including investments in Eastern Europe's music market, property in London, a farm in Kenya, and a venture in Mexico, all funded by evaded taxes. IRS-CI, alongside international partners such as His Majesty's Revenue & Customs of the United Kingdom and the Guardia Civil of Spain, contributed to the arrest and built a case emphasizing Edelman's misuse of tax funds for personal gain.
Edelman is staring down a maximum penalty of five years in prison for each of the 10 counts to which he has pleaded guilty. His final sentence is pending and will be determined after considering guidelines and statutory factors. The collaboration of domestic and international agencies in the investigation underscores the global effort to uncover and prosecute tax-related crimes.
