CONSTRUCTION COMPANY OWNER PLEADS GUILTY TO NOT PAYING PAYROLL TAXES

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, August 20, 2013

New York Maintenance and Construction Company Owner Pleads Guilty in Manhattan Federal Court to Failing to Pay Payroll Taxes
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, announced today the guilty plea of Thomas Nastasi III, 46, of Mt. Kisco, N.Y., to one count of willful failure to pay the Internal Revenue Service (IRS) the payroll taxes of his company, Nastasi Maintenance & Construction LLC.  Nastasi pleaded guilty before U.S. District Judge Paul G. Gardephe in the Southern District of New York.

According to the previously filed indictment and statements made during Nastasi’s guilty plea, from 2001 through 2011, Thomas Nastasi III owned and operated several Manhattan construction and maintenance companies, including Nastasi Maintenance & Construction.  As the president of the companies, Nastasi was responsible for withholding payroll taxes from his employees and paying them over to the IRS.  Those taxes included the employees’ income taxes, Social Security, and Medicare taxes.  Nastasi accumulated over $1.7 million in payroll taxes that were owed but never paid to the IRS. Those taxes included the employer’s portion of Social Security and Medicare taxes for his employees.

Court documents and statements also established that instead of paying the companies’ payroll taxes to the IRS, Nastasi used company funds to pay hundreds of thousands of dollars in personal expenses, for items including boat-related expenses and cigars. Nastasi also made false statements to the IRS in the course of its attempts to obtain delinquent tax returns and collect the corporate and personal taxes owed by Nastasi and his companies.

“Employers who use taxes withheld from their employees’ paychecks to fund their own lavish lifestyles instead of paying over the funds to the government show a blatant disregard not only for the law, but also for all honest taxpayers who work hard and play by the rules,” said Assistant Attorney General Kathy Keneally.  “Business owners who commit these crimes not only face jail time, but also must repay the stolen taxes, with interest and penalties.”

“Business owners who misdirect employment taxes to their own personal ends are stealing from their employees and all taxpayers’ futures,” said Richard Weber, Chief of IRS Criminal Investigation. “Thomas Nastasi III funded an extravagant lifestyle with his ill-gotten gains, including $67,000 spent on cigars. When investigated, he made false statements in an attempt to obstruct our special agents.  IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes.”

Sentencing is set for Dec.19, 2013, at 2:30 p.m. before Judge Paul Gardephe.

Assistant Attorney General Keneally thanked special agents of IRS-Criminal Investigation and the U.S. Attorney’s Office for the Southern District of New York for their efforts in this case.

CONSTRUCTION COMPANY OWNER INDICTED FOR TAX FRAUD

FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, July 19, 2013

Owner of New York Construction Company Indicted for Tax Fraud
The Justice Department and Internal Revenue Service (IRS) announced that Gurmail Singh, of Richmond Hill, N.Y., was arrested yesterday following his indictment on July 11, 2013, for multiple tax crimes.  The indictment was unsealed yesterday following his arrest.

According to the indictment, Singh owned Fancy and Vicky Construction Co. Inc., a construction company in Richmond Hill. As alleged in the indictment, Singh used check-cashing services to cash more than $2.9 million of checks paid to his construction company for services between 2006 and 2008.  He concealed his check-cashing activities from his tax return preparers, and this income was not included as gross income on the company’s tax returns.  Singh also diverted cash receipts earned by his companies for his own personal use.

The indictment alleges that Singh filed false 2006 and 2007 corporate income tax returns for Fancy and Vicky Construction, failed to file a 2008 corporate income tax return for Fancy and Vicky Construction and failed to file individual income tax returns for 2007 and 2008.  Singh faces a potential maximum sentence of nine years in prison and a potential fine of up to $800,000.

A trial date has not been scheduled. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division, commended the efforts of special agents of IRS–Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Mark Kotila and Jeffrey Bender, who are prosecuting the case.

CONSTRUCTION COMPANY WILL PAY $1.15 MILLION TO SETTLE FALSE CLAIMS ALLEGATIONS

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, March 25, 2013
Caddell Construction Agrees to Pay $1,150,000 to Resolve False Claims Allegations
United States Alleges that Company Falsely Claimed Payment For Native American-Owned Business Participation

The Justice Department announced today that Alabama-based Caddell Construction has agreed to pay to the United States $1,150,000 to settle allegations that it violated the False Claims Act by falsely reporting to the Army Corps of Engineers that it hired and mentored a Native American-owned company to work on construction projects at Fort Bragg, N.C., and Fort Campbell, Ky.

The Army Corps contracted with Caddell between 2003 and 2005 to build barracks at the two bases. As part of the contracts, Caddell represented that it would hire and mentor Mountain Chief Management Services, a Native American-owned company, under the Department of Defense’s Mentor-Protégé and Indian Incentive Programs. The Mentor-Protégé Program reimburses companies for the time and cost of mentoring small disadvantaged businesses, while the Indian Incentive Program provides a rebate to contractors for subcontracting with Native American-owned businesses.

The United States alleged that from April 2003 to March 2005, Caddell falsely represented in its invoices and supporting documents that it was mentoring Mountain Chief and that Mountain Chief was performing work on the construction projects. According to the government, Mountain Chief allegedly was merely a pass-through entity used by Caddell to claim payments under the two programs, and didn’t perform the work or receive the mentoring services for which Caddell received payment.

"Contractors that subvert important government programs, such as those designed to benefit small and Native American-owned businesses, will be held accountable," said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. "We will work tirelessly to ensure that participants in federal programs and benefits receive only the money to which they are entitled."

Caddell’s former director of business development, Mark Hill, and Mountain Chief’s former president, Daniel Chattin, were indicted on related charges in federal district court for the Middle District of Alabama in January 2012. Both are awaiting trial. In December 2012, Caddell entered into a non-prosecution agreement with the United States under which it agreed to pay the United States $2 million and to cooperate in the ongoing criminal matter.

The civil case was handled by the Civil Division of the Department of Justice, with investigative assistance provided by the General Services Administration Office of Inspector General and the Defense Criminal Investigative Service.