Jonathon Felix paid his expenses by underreporting his income to the IRS. He should have known better. On May 22, Felix, the owner-operator of United Professional Plans, Inc. (UPPI), a firm handling benefits claims for a number of Philadelphia-area unions, was convicted by a federal jury of tax evasion over four years totaling nearly $400,000. Evidence at the trial indicated that he transferred funds from his company to his own use, which helped cause the demise of the firm. Felix did not report these transfers as taxable income. Among the unions that UPPI represented was American Federation of State, County and Municipal Employees (AFSCME) District Council 33, which represents various city employees in Philadelphia.
Felix, 51, a resident of the Philadelphia-area suburb of Narberth (Montgomery County), was a dental benefits contractor. Through UPPI, he processed claims and resolved disputes between his union clients and dental care providers. For his services, he received management fees either on a per-claim or per-person basis. Unfortunately, he was as efficient as taking money from his company as he was at generating it. During tax years 1999 through 2002, say prosecutors, Felix withdrew money from UPPI coffers toward personal expenses and willfully failed to report the funds as income. These transfers were a key reason why the company went out of business. The tax loss to the IRS was about $390,000. Sentencing is scheduled for August 23.
Evidence from a related separate criminal case reveals Felix had help from a certified public accountant. The CPA would be Dennis Glick, indicted by a Philadelphia federal grand jury in March 2011 for “corruptly endeavoring to obstruct and impede the due discrimination of the Internal Revenue laws, and willfully aiding and assisting in the preparation and filing of false federal income tax returns.” According to prosecutors, Glick, a resident of Huntingdon Valley, Pa., falsified UPPI tax returns and then, during 2004-05, denied doing so to federal agents investigating Felix’s returns. Glick eventually was convicted in October. By then, he had stepped down from his main job, president of B’nai B’rith International, the oldest Jewish social service organization in the world. Jonathon Felix should have done his own taxes.