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New York State Department of Taxation and Finance Commissioner Robert L. Megna announced today that five business owners in western New York have been charged in separate cases for failing to file sales tax returns and thus failing to report thousands of dollars in taxable sales from 2005-2007.
The businesses, four in the Rochester area and one in Erie County, include an upscale coffee and latte bar, a heavy equipment repair company, an off-road vehicle dealer, an air conditioning repair company and a landscaper.
In each case, the defendants applied for and received a Tax Department Certificate of Authority allowing them to collect sales tax, and knew of their obligation to collect and remit those taxes to the state. They were also required to periodically file sales tax returns accounting for their sales.
Instead, according to the charges filed in these cases, the defendants collected sales taxes from their customers, and held onto the money rather than remitting it to the State. They also did not file the required sales tax returns.
Each defendant was served with an appearance ticket requiring them to answer charges filed in local criminal courts alleging multiple counts of Willful Failure to File a Return or Report under the tax law. They each face up to two years in jail if convicted.
Those charged in the Rochester area include:
Stephanie Recco, 53 Caraway Lane, Spencerport, the owner of The Coffee Cabana, a coffee and latte bar located at 123 Union Road in Spencerport. Recco is charged with seven misdemeanor counts of failing to file sales tax returns from March 1, 2006 to November 30, 2007. She is scheduled to appear in Ogden Town Court on May 19, 2008.
Mark D. Northrup, 4554 Goose Street, Stanley, and his company, Power Tech Services, Inc., a heavy equipment and vehicle repair facility, are charged with nine misdemeanor counts of failing to file sales tax returns from September 1, 2005 to November 30, 2007. He is scheduled to appear in Rochester City Court on May 16, 2008.
James G. Kettles, 90 Owaissa Drive, Rochester, the owner of Grassmasters Lawn & Landscape, is charged with three counts of failing to file sales tax returns from June 1, 2005 to February 28, 2006. He is scheduled to appear in Henrietta Town Court on May 13, 2008.
Walter G. Malafeew, Jr., 80 Lehigh Avenue, Rochester, the owner of Worry Free Refrigeration, an air conditioner repair company, is charged with two counts of failing to file sales tax returns from March 1, 2005 to February 28, 2006. He is scheduled to appear in Rochester City Court on May 9, 2008.
In the Erie County Village of Blasdell, Robert J. Michalski, 3662 South Park Avenue, the owner of Recreational Parts and Accessories, a retail and service store for off-road vehicles, is charged with six counts of failing to file sales tax returns from June 1, 2006 to November 30, 2007. He is scheduled to appear in Blasdell Village Court on May 6, 2008.
Commissioner Megna said, "Retail businesses are obligated to file sales tax returns, collect sales taxes, and remit those taxes to the state. Those who deliberately fail to do so will be held accountable. Each of these vendors refused to play by the rules even when reminded of their obligations. By engaging in criminal conduct these vendors deprive state and local governments of revenues needed to deliver crucial services, and cheat their customers by pocketing sales tax revenues."
Commissioner Megna thanked Monroe County District Attorney Michael C. Green and Erie County District Attorney Frank Clark for their aggressive prosecution of these cases. The cases were investigated by staff from the Tax Department's Special Investigations Unit offices in Rochester, Buffalo and Syracuse. The Special Investigation Unit, which was created in 2007, is a multi-disciplinary investigative unit of attorneys, investigators and forensic auditors dedicated to investigating and prosecuting tax fraud.
All of the defendants listed above are presumed to be innocent unless and until proven guilty.
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Last Modified: May 02, 2008
