Morganville Construction Biz Operator Pleads Guilty To Tax Fraud

MORGANVILLE, NJ - A Morganville resident who operates a Manhattan-based construction business pled guilty in federal court this week after participating in a tax evasion scheme over the course of several years. The scheme resulted in a tax loss to the IRS of nearly $1 million, according to the U.S. Attorney’s Office of the Southern District of New York.

Bilal Salaj, 55, pled guilty to one count of conspiracy to defraud the IRS, one count of tax evasion, and one count of failure to pay over payroll taxes, each of which carries a maximum sentence of five years in prison.

While Salaj was initially the record owner of the business, in approximately July 2014, the Morganville resident began operating the business under a new entity that was “wholly owned” by a third party who worked for the construction business, according to the U.S. Attorney's Office. Despite the purported change in ownership on paper, the Morganville man continued to control and hold decision-making authority over the business.

According to the U.S. Attorney's Office, in or about June 2019, Salaj “devised and perpetrated a scheme to evade a substantial portion of both the payroll taxes for the construction business and personal income taxes for the period 2014 through 2018.”

During the four-year period, the Morganville man cashed - and had the on-paper business operator cash - approximately $3.2 million in business checks payable to the construction company at check cashing facilities in New York instead of depositing them into the company’s operating bank account. He also withheld from his accountant any records relating to the cashed business checks, thereby filing false tax returns with the IRS, prosecutors said.

“As he admitted in court today, Bilal Salaj defrauded the IRS by evading both payroll taxes for his business and personal income taxes,” Acting U.S. Attorney Audrey Strauss said in a statement. “To carry out the scheme, Salaj lied to his own accountant and caused false tax returns to be filed with the IRS. Now he awaits sentencing for his crimes.”

Salaj and his accomplice also used a portion of the proceeds from the cashed checks to pay cash wages to employees of the construction business, and spent most of the rest on personal expenses. The Monmouth County man did not withhold or pay over to the IRS any payroll taxes on the cash wages paid to the employees, and did not report to the IRS or pay any personal income taxes on the cash income he realized through the cashed checks, according to the U.S. Attorney's Office.

As part of his plea agreement, Salaj has agreed to pay restitution to the IRS in the amount of $952,778. Sentencing is scheduled for March 3, 2021 before U.S. District Judge P. Kevin Castel.

“When Mr. Salaj made the decision to evade paying taxes for himself and his business, he also made the decision to cheat every honest hardworking taxpayer,” IRS-CI Special Agent-in-Charge Michael Montanez said in a statement. “ Today’s guilty plea should send a strong deterrent message that [the] IRS-Criminal Investigation will vigorously pursue those individuals who attempt to cheat our nation’s tax system.”

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