8 Charged With Filing Fraudulent Tax Returns, Not Paying Tax: DA

RIVERHEAD, NY — Suffolk County District Attorney Timothy Sini announced the arrest of eight individuals, including three tax preparers, for allegedly filing fraudulent tax returns, failing to file personal income tax returns and failing to pay personal income taxes, the DA's office said in a release.

Sini, along with the New York State Department of Taxation and Finance, said on Wednesday that the arrests were part of a concerted law enforcement effort during tax season to crack down on individuals committing tax fraud in New York State.

“When someone cheats on their taxes, it's not only an act of dishonesty, but it's cheating everyone else who is playing by the rules,” Sini said. “It is a serious crime to not pay your taxes, particularly through fraudulent means, because it has an impact on all of us; it impacts law-abiding citizens and it has an impact on the government initiatives and projects that are so important to the public safety and well-being of our residents.”

“Let this serve as a clear warning to any taxpayers considering lining their own pockets at the expense of honest citizens,” said New York State Department of Taxation and Finance Deputy Commissioner of Criminal Investigations John Harford. “Fraud is not a victimless crime. It deprives New Yorkers of vital funding for their communities. We’ll continue to work with all levels of law enforcement to root out this criminal activity.”

Among the defendants arrested were five local business owners who allegedly failed to report and pay taxes on the income they received from those businesses, Sini said, including:

— Robert Falco, 61, of Lake Grove, was charged with eight counts of third degree criminal tax fraud, a felony, for failing to file personal income tax returns from 2014 through 2017 to evade the payment of approximately $145,010 in New York State personal income taxes, Sini said. Falco is the owner of Corporate Climate Control, located at 22 Sycamore Ave. in Lake Grove, Sini said.

— Marc Leibowitz, 48, of Melville, was charged with four counts of third degree criminal tax fraud, a felony, for failing to file personal income tax returns for 2013 and 2015 and first degree offering a false instrument for filing, a felony, for allegedly filing a false personal income tax return in 2014, Sini said. It is alleged that Leibowitz committed those acts to evade the payment of approximately $37,444 in New York State personal income taxes, Sini said. Leibowitz is the owner of Guss' Glatt, Inc., Leibowitz Enterprises NY, Inc., and Guss Provisions, Inc., located at 15 Treeview Drive in Melville, Sini said.

— Steven Morales, 58, of Sayville, was charged with second degree grand larceny, a felony, and two counts of first degree offering a false instrument for filing, a felony, Sini said. From 2012 through 2015, Morales allegedly stole approximately $55,759.70 in sales tax collected on behalf of New York State, Sini said. To further the scheme, Morales filed false New York State sales tax returns that substantially underreported the amount of sales tax collected on behalf of New York State, Sini said. Morales was also charged with four counts of third degree criminal tax fraud, a felony, for failing to file personal income tax returns for 2014 and 2015 to evade the payment of approximately $14,655 in New York State personal income taxes, Sini said. Morales is the owner of Countywide of Suffolk, Inc., Countywide Autobody Corp., Countywide Collision & Towing of Islip Corp., and Countywide of Islip Corp., located at 1498 Spur Drive South in Islip, Sini said.

- Justin Palladino, 38, of West Babylon, was charged with five counts of third degree criminal tax fraud, a felony, fourth degree criminal tax fraud, a felony, and two counts of first degree offering a false instrument for filing, a felony, for allegedly failing to file personal income tax returns for 2013 and 2015 and filing false tax returns for 2014 and 2016, Sini said. It is alleged that Palladino committed the acts to evade the payment of approximately $47,143 in New York State personal income taxes, Sini said. Palladino is the owner of Epoxy Tek Manufacturing, Inc., Northeast Decorative Concrete Supply, Inc., and Epoxy Tek Floors, Inc., located at 445 Broadhollow Road in Melville, Sini said.

- Lawrence Sparks, 55, of Brookhaven, was charged with six counts of third degree criminal tax fraud, a felony, and two counts of first degree offering a false instrument for filing, a felony, for allegedly failing to file personal income tax returns for 2013, 2016 and 2017 and filing false tax returns in 2014 and 2015, Sini said. It is alleged that Sparks committed acts to evade the payment of approximately $189,786 in New York State personal income taxes, Sini said. Sparks is the owner of LNNS Construction & Consulting, Inc., located at 20 Jareds Path in Brookhaven, Sini said.

The initiative also resulted in the arrest of three tax preparers who are alleged to have participated in a scheme to use defunct corporations to fraudulently claim tax deductions for their clients, thereby reducing their clients’ tax liabilities, Sini said. Two of the tax preparers are also charged for failing to truthfully report their own income, Sini said:

- Richard Pearl, 69, of Commack, was charged with two counts of third degree criminal tax fraud, a felony, for allegedly filing false personal income tax returns in 2015 and 2016 to evade the payment of approximately $40,456 in New York State personal income taxes, Sini said. Pearl is also charged with first degree offering a false instrument for filing, a felony, for filing false tax returns as a tax preparer, Sini said.

- Tara Petito, 38, of Selden, was charged with first degree offering a false instrument for filing, a felony, for allegedly filing false tax returns as a tax preparer, Sini said.

- Mary Wickman, 63, of Commack, was charged with two counts of fourth degree criminal tax fraud, a felony, for allegedly filing false personal income tax returns in 2015 and 2016 to evade the payment of approximately $34,032 in New York State personal income taxes, Sini said. Wickman was also charged with first degree offering a false instrument for filing, a felony, for filing false tax returns as a tax preparer, Sini said.

In total, the amount of income not reported to New York State by those charged was $7,629,980.

If convicted, Morales faces a maximum sentence of five to 15 years in prison, Sini said. If convicted, Falco, Leibowitz, Palladino, Pearl, and Sparks each face a maximum sentence of two and one-third to seven years in prison, Sini said. And, if convicted, Wickman and Petito each face a maximum sentence of one and one-third to four years in prison, Sini said.

Falco, Leibowitz, Palladino, Pearl, and Sparks were arraigned on the charges on March 25 and were all released on their own recognizance, Sini said. Morales was arraigned Tuesday and was released on his own recognizance; Wickman and Petito will be arraigned at a later date, Sini said.

“As we near the end of this tax filing season, we want to send a clear message to tax evaders that we will not tolerate their attempt to game the system,” Sini said. “Our tax crimes unit will continue to work with our local, state and federal partners to identify individuals or tax preparers who are cheating and hold them accountable.”

The cases are being prosecuted by Assistant District Attorney Joseph T. Conley, III, Attorney-in-Charge of the Financial Investigations and Money Laundering Bureau’s Tax Crimes Unit.