Fraudster Can’t Deduct Loss in $3.2 Million Bribery Scheme

A former U.S. State Department employee who was indicted for taking bribes in a U.S. visa fraud scheme can’t deduct the losses he incurred in forfeiting Thai real estate, the U.S. Tax Court said Monday.

Consular officer Michael Sestak launched a fraud scheme in 2010 with a Vietnamese national to approve non-immigrant U.S. visas in exchange for bribes, netting $3.2 million. To hide the money, Sestak purchased nine real estate properties in Thailand and hid the scheme from the IRS and the federal government. In 2013, he pleaded guilty to a count of conspiracy against the United States; he sold ...