New London Restaurant Owner Pleads Guilty To Tax Evasion

The owner of a downtown New London restaurant has pleaded guilty to failing to report over $1 million in income, the U.S. Attorney for the District of Connecticut announced today.

Luciano G. Mase, 56, of Westbrook waived his right to indictment and admitted to one count of evading federal income tax. Mase is charged with failing to report almost $1.4 million in income over a seven-year period. The plea was entered before United States Magistrate Judge Joan Glazer Margolis in New Haven.

The case against Mase stated that he is the sole owner of Moreland Corp., which does business as . Prosecutors said Mase incorporated the business in his daughter's name, received no payments from the business, and had signatory authority over the business's two bank accounts. Through the operations of the restaurant, Moreland Corp. generated cash receipts, and Mase deposited some of these into his personal bank accounts rather than business bank accounts.

The U.S. Attorney's Offices says that in making the plea, Mase admits to filing false income tax returns for the Moreland Corp. that underreported the Moreland Corp's gross receipts for the years 2003 through 2009. The business issued K-1 forms in each of those years attributing its income to Mase's daughter rather than to him. Mase failed to report $1,397,039 on his federal income tax returns as a result.

"The majority of income reported on MASE’s tax returns consisted of funds generated from his restaurant business," the U.S. Attorney's Office said in a statement. "The unreported income consisted of funds generated from his restaurant.

Mase pleaded specifically to his individual tax return for 2007. He stated that his taxable income for that year was $50,976, with $9,618 in tax due. Mase's actual taxable income for the year was about $613,123, resulting in an underpayment of $169,061 in federal income tax.

Mase is scheduled to be sentenced by Senior U.S. District Judge Ellen Bree Burns on Feb. 12. He can be ordered to serve up to five years in prison with a maximum fine of $250,000.

Mase agreed that the total underpayment in taxes to the Internal Revenue Service between 2003 and 2009 is $450,485, and will pay $380,475 to the IRS and $70,010 to the State of Connecticut, plus interest and penalties. Agents with  IRS - Criminal Investigation made a court-authorized search of Mase's residence on April 30, 2010, and seized $225,010. This money has been applied to his tax liability.

The case was investigated by the IRS - Criminal Investigation and is being prosecuted by U.S. Attorney Peter S. Jongbloed.