Seven Rochester Area Businessmen Charged With Felony Sales Tax Fraud
Vendors Cheated New York State by Collectively Failing to Report More Than $5.4 Million in Taxable Sales
For Release: Immediate, Wednesday, May 05, 2010
Contact: Geoffrey Gloak, 518-457-7377
New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward announced today that seven Rochester area businessmen were arrested in separate cases and each has been charged with felony grand larceny for stealing state and local sales tax and failing to remit the money to New York State.
To commit these larcenies, it is alleged that the defendants collectively failed to remit more than $450,000 in sales taxes collected from their customers to the Department and failed to report more than $5.4 million in taxable sales.
Each defendant was arraigned today before Judge Stephen T. Miller in Rochester City Court and released on his own recognizance. If found guilty, each of the defendants faces up to 15 years in state prison.
Those charged include:
William H. Keller, Jr., 35, of 293 Winchester Street, Rochester, and Robert A. Keller, 34, of 72 Ferris Street, Rochester, former co-owners of Charlie Brown's Restaurant, located at 495 Goodman Street, North, Rochester. The Keller brothers are charged with Grand Larceny in the Second Degree, a class C felony, and misdemeanor counts for failing to file sales tax returns. The felony complaint alleges that from January 2007 until August 31, 2008, the owners collected $57,854 in sales tax from their customers but failed to pay New York State. It is also alleged that the defendants failed to file any quarterly sales tax returns during the same period.
Daniel B. Traina, 48, of 45 South Main Street, Pittsford, owner of Caribbean Forest, a pet fish store located at 24 Bursen Street, Rochester. Traina is charged with Grand Larceny in the Second Degree, a class C felony, and numerous class E felony counts for filing false sales tax returns and income tax evasion. According to court documents, Traina collected sales tax from his customers totaling $103,936 from March 1, 2006 through February 28, 2009 yet paid New York State only $48,259. It is also alleged that Traina underreported his New York State personal income tax liability by about $33,000 on returns filed for taxable years 2006, 2007 and 2008.
James C. Inzinga, 54, of 291 Peck Road, Hilton, operator of Cristo Collision West, a collision shop located at 150 Lee Road, Rochester. Inzinga is charged with Grand Larceny in the Second Degree, a class C felony, and four class E felony counts for filing false sales tax returns. The felony complaint alleges that between December 1, 2004 and February 28, 2006, Inzinga stole $59,346 in sales tax collected from his customers by failing to remit the taxes to New York State. Inzinga is also charged with felony counts of Tampering with Physical Evidence and Offering False Instruments for submitting 59 phony repair invoices to a Tax Department auditor during a routine sales tax audit.
Gary E. Northrup, 46, of 169 North Greece Road, Hilton, owner of Greece Town Garage, an auto repair shop located at 605 Ling Road, Greece. Northrup is charged with Grand Larceny in the Second Degree, a class C felony, multiple class E felony counts for filing false sales tax returns, and misdemeanor counts for failing to file sales tax returns. Court documents allege that between June 1, 2004 and June 20, 2008, Northrup collected $54,033 in sales tax from his customers and failed to pay this sum to New York State.
Zacarr A. Johnson, 33, of 82 Youngs Avenue, Rochester, owner of Zaris Auto, a used car dealership located at 85 Lyell Avenue, Rochester. Johnson is charged with Grand Larceny in the Second Degree, a class C felony and misdemeanor counts of failing to file sales tax returns. Johnson is also charged with a class E felony count of repeated failure to file personal income tax returns for taxable years 2005, 2006 and 2007. The felony complaint alleges that Johnson stole $73,754 in sales tax collected from his customers which he failed to pay to New York State from December 1, 2004 through June 20, 2008.
Peter M. Davidson, 52, of 107 Willowen Drive, Irondequoit, owner of Advance Auto, a used car dealership located at 139 Lyell Avenue, Rochester. Davidson is charged with Grand Larceny in the Second Degree, a class C felony and misdemeanor counts of failing to file sales tax returns. Davidson is also charged with a class E felony count of repeated failure to file New York State personal income tax returns for taxable years 2005, 2006 and 2007, and a misdemeanor count of Criminal Tax Fraud in the Fifth Degree for failing to file a New York State personal income tax return for tax year 2008. The felony complaint alleges that from December 1, 2001 through February 28, 2009, Davidson stole $126,053 in sales tax collected from his customers which he failed to remit to New York State.
Acting Commissioner Woodward said, "Retail businesses are obligated to collect sales taxes, file tax returns, and pay the sales taxes they collect from their customers to New York State. Business owners who knowingly persist in failing to file returns and pay the taxes they collect are committing a crime. Those who pocket collected sales tax revenues are cheating their customers and depriving state and local governments of revenues that are needed to deliver crucial services.
"These cases illustrate the Department's determination to aggressively investigate criminal violations of our tax laws and to work with local prosecutors such as Monroe County District Attorney Michael C. Green to bring tax delinquents to justice. I'm grateful to District Attorney Green and his staff for their assistance."
Acting Commissioner Woodward added, "Since 2008, the State has offered programs such as the Voluntary Disclosure and Compliance Program to encourage delinquent taxpayers to become compliant without facing criminal prosecution or civil penalty. It is hoped that these arrests will encourage such taxpayers to come forward and satisfy their obligations. For more information about these programs, go to the Department's website at www.tax.ny.gov."
The cases were investigated by staff from the Department's Special Investigations Unit offices in Rochester and Buffalo.
All of the defendants are presumed to be innocent unless and until proven guilty.