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July 28, 2014, 6:35 pm

Chaka Fattah Jr. files lawsuit against IRS

Consultant Chaka Fattah Jr. Photo by Abdul R. Sulayman/Chief Tribune Photographer. Consultant Chaka Fattah Jr. Photo by Abdul R. Sulayman/Chief Tribune Photographer.

In what Chaka Fattah Jr. admitted could be viewed by some as “an escalation of the situation,” the one-time consultant last week filed an 18-page lawsuit against the Internal Revenue Service, citing what Fattah says were several violations of protocol and privacy in connection with the Feb. 29, 2012 raid on Fattah’s Center City apartment at the swanky Ritz-Carlton.

Fattah’s lawsuit, filed with the United States District Court of the Eastern District of Pennsylvania, seeks $928,001 — including $500,000 for “lost reputation,” $300,000 for “direct economic damages” relating to loss contracts, $100,000 for various inconveniences brought on by the early-morning IRS raid — a short time after which, Fattah said, FBI investigators showed up, requesting much of the same documentation sought by the pair of IRS agents — and $18,001 as a refund of civil penalties that Fattah said he has already paid.

“The disclosures regarding the actions government agencies took on Feb. 29, 2012, were in violation of numerous IRS rules, regulations and laws. In addition, they were in violation of laws regarding privacy and other laws, which also apply to the FBI and the U.S. Department of Justice,” Fattah said in an exclusive interview with the Philadelphia Tribune. “Those federal agencies have a responsibility to pursue truth and justice. However, it is critical that individuals such as the employees or officers of these respective federal agencies, who hold so much power, strictly follow all laws in regard to their dealings with citizens … the United States, in my opinion, is a system of laws. Confidence in our government can be easily shaken when federal agencies as alleged in my lawsuit abuse their power and leak private, confidential and financial information to media sources.”

A portion of Fattah’s complaint is the contention that federal officials tipped off the local media about the raid. Fattah said the only plausible conclusion is that someone from either agency alerted the press — as the next day’s edition of a prominent daily newspaper featured photos of the plainclothed federal agents entering and leaving Fattah’s residence.

On that fateful February day, investigators conducting the raid were reportedly looking for financial records detailing any impropriety between Delaware Valley High School and Fattah, and were also looking for several years’ worth of tax returns. Published reports contend that Fattah, through Fattah’s agency, Legal Marketing Strategies, LLC, was paid more than $400,000 by DVHS President David T. Shulick — a figure that represents 10 percent of the $4 million contract DVHS had at the time with the School District of Philadelphia. During that raid, officials seized several cell phones and laptops, Fattah said, leaving him without adequate means to cull documents or provide even more detail to investigators.

That raid, Fattah said, occurred inside Shulick’s law offices — out of which Fattah was subleasing an office.

Since that incident, Fattah said his business dried up as colleagues and clients deserted him — along with his dealing with mounting legal fees that are now in the six figures. Fattah said he hasn’t received any contractual work in the two years that have lapsed since that raid.

Fattah’s suit outlined the emotional distresses, loss of reputation, inconveniences and civil penalties Fattah is claiming.

“Plaintiff had a positive reputation in the Philadelphia business community through hard work and building relationships based on the quality of work and advice, which led to substantial value for the plaintiff’s clientele and substantial income for the plaintiff,” read a portion of the lawsuit, which Fattah filed on his own behalf, and did not include the input of the legal team at Morgan Lewis and Bockius, LLP, which represented Fattah during the raid and the subsequent meetings between federal investigators and Fattah’s legal representatives. “This reputation was often rewarded with more substantive and lucrative work assignments, and resulted in over $625,000 in combined revenue in 2010 and 2011, and substantial profits in those years as well. This claim is for $500,000.

“Plaintiff has suffered numerous inconveniences as a result of the defendant’s actions. Plaintiff has lost numerous business opportunities due to the defendant’s actions including contract opportunities,” the suit continued. “This includes a success bonus the plaintiff was eligible for in the contract with Shulick Law Offices, which was valued at over $100,000. The claim for damages is $100,000 … the IRS improperly denied the abatement of civil penalties in violation of their own guidelines. The IRS then denied the plaintiff appeal rights, which is another violation of the Internal Revenue Code and taxpayer rights. The total of the five penalties that should have been abated under IRS guidelines is $18,001.”

Fattah intimated that he is unsure if his reputation can ever be repaired, regardless of any decision from federal investigation agencies or the outcome of Fattah’s lawsuit against the IRS. And Fattah is cognizant enough to realize that he is taking on a federal agency that possesses nearly limitless resources and has shown a willingness to go to great lengths to prosecute. Still, Fattah sees no other way to clear his name and reputation other than pressing forward — even if the feds haven’t exactly charged him with anything, yet.

“I decided to file this lawsuit after much considered thought and reflection about the opportunities and risks associated with filing this action,” Fattah said. “I believe that the IRS inappropriately disclosed my name, address and critically, the timing and location of the action on Feb. 29, 2012, which is one of the key issues to be decided in this lawsuit,” Fattah said. “I am hopeful that this action will force the IRS and related federal agencies to take a close look at their actions regarding the events of Feb. 29, 2012.”

 

Contact staff writer Damon C. Williams at (215) 893-5745 or This email address is being protected from spambots. You need JavaScript enabled to view it. .