Chief Hennepin County Public Defender Kassius Benson under federal investigation for tax evasion

Hennepin County Chief Public Defender Kassius Benson is under federal investigation into whether he failed to pay federal taxes withheld for employees at the private law firm he ran before taking his public job, according to a search warrant affidavit and a grand jury witness.

Benson ran his own Minneapolis-based criminal defense firm called Kassius Benson Law before he started in the Hennepin County job in January 2021.

As the sole shareholder at his firm, Benson was responsible for the collection and payment of employment taxes and filing the appropriate quarterly IRS forms, the warrant said. He employed at least five people in 2013 and again from 2015-2019, and failed to file proper quarterly forms and turn over $159,262 in taxes he withheld during that stretch, the affidavit said. The warrant, issued in January, was under seal until July.

As a criminal defense attorney, Benson knew his duty and obligations to the IRS, the document said. The federal affidavit, initially filed under seal, sought access to servers containing payroll records from Benson's firm dating to 2013.

Benson didn't respond to requests for comment Thursday. State Chief Public Defender William Ward, who oversees Benson's office, said in a statement that he and the state Board of Public Defense are aware of the IRS investigation into Benson.

"At this point, these are only allegations. Should the allegations be formalized, like all citizens, Mr. Benson is innocent until proven otherwise in a court of law," Ward said. "We are monitoring the situation and will take appropriate action — if necessitated — as circumstances unfold."

Ward said he was unaware of the IRS investigation before Benson was hired for the Hennepin County job.

Benson has not been charged with a crime, and the investigation may not result in an indictment.

In his current job, Benson oversees a much bigger office than his private law firm. On the office's website, he says he oversees 120 attorneys and more than 70 support staff. His annual salary is $145,288.

Benson faced questions earlier this year about whether he was improperly continuing to take private clients in his new job; he said he wasn't.

One former employee of Benson's private firm, who spoke on condition of anonymity, told the Star Tribune that they testified in July under subpoena before a federal grand jury investigating Benson. "I was asked questions regarding my employment history, and I was asked to produce tax documents related to my employment," the employee said.

The former employee said the paychecks and documents reflected that federal taxes and Social Security were withheld from their pay.

The federal probe started in July 2020 — six months before Benson was hired by the state — when, according to the affidavit, revenue agent Joni Jacobsson began an audit relating to forms 940 and 941 that Benson was to have filed in 2017. The agent expanded the investigation to 2013 and 2015-2019 upon finding that Benson had failed to pay employment taxes, unemployment taxes and to file the forms.

Based on employee W-2 forms from those years, Benson paid gross wages of $710,079, the court documents said. He withheld $159,262 in total employment taxes from his employees but failed to turn over the money to the government, the affidavit said.

When Jacobsson interviewed Benson, he confirmed that he was responsible for his firm's payroll and that he used a third-party service called paycheckmanager.com.

By January 2021, Benson had stopped speaking to Jacobsson, the court documents said. He paid all taxes and filed the appropriate forms for 2020, but he did not file the forms or pay the taxes for 2013 and 2015-2019, the affidavit said. Benson reported no employees in 2014 and didn't issue any W-2 forms, the documents said.

The case is being handled by Assistant U.S. Attorney Christopher Lin, who works in the Tax Division based in Washington, D.C. Attempts to reach him were not successful.

David Schultz, Hamline University professor of political science and legal studies, said it's significant that a tax investigation went from an audit to a grand jury investigation.

"Prosecutors are not so foolish to take a case to a grand jury unless they think they have something and can get an indictment," Schultz said. "Obviously, an indictment is not proof of guilt, but generally getting it in front of a grand jury is proof there's gonna be an indictment."

Criminal defense attorney Joe Friedberg said tax cases are trickier. "The old saying that a grand jury will indict a ham sandwich is true — except for tax cases," Friedberg said.

The investigation into Benson has been the talk of the office he now runs, where he is a polarizing figure.

Public defenders' union steward Bob Kolstad has been critical of Benson in the past and raised concerns the investigation would hurt the office's reputation.

"I'm afraid of what the ramifications might be as far as people wanting to work for the public defenders in Minnesota," Kolstad said. "A lot of young lawyers have been recently hired and the leader of our office has to be a role model."