New York Business Owner Pleads Guilty to Payroll Tax Fraud | OPA

The owner of a Brooklyn construction business, AD Custom Interiors Inc., pleaded guilty on July 9 to not paying payroll taxes to the IRS.

According to court documents, as the sole owner and operator of AD Custom, Anthony Riccio had a duty to truthfully account for and pay over to the IRS payroll taxes owed by his employees. From approximately January 2011 through January 2016, Riccio cashed over $3.1 million in checks paid to AD Custom. Riccio used some of that cash to pay wages to his employees. Riccio concealed these cash payments from AD Custom’s return preparer, causing the accountant to prepare employment tax returns that underreported wages and payroll taxes owed. Over five years, Riccio failed to pay $255,433 in federal payroll taxes, including income, Social Security and Medicare taxes, owed by AD Custom and its employees.

Riccio is scheduled to be sentenced on Oct. 21 and faces a maximum penalty of five years in prison. Riccio also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Shawn T. Noud and Mark W. Kotila of the Justice Department’s Tax Division are prosecuting the case.