Salvatore “Sallie” DeMeo, 77, alleged Mafia soldier of the Genovese crime family, was recently charged with tax evasion after failing to report more than $2 million in income to the Internal Revenue Service (IRS). Prosecutors allege that DeMeo, who has previously been convicted of racketeering and robbery, cheated the federal government out of approximately $365,000 in unpaid taxes on the undisclosed income. If convicted, DeMeo could be facing up to three years in prison.
In 2006, DeMeo was released from prison after serving a five-year sentence for bank robbery and other offenses. He could be returning if the latest charges result in a conviction.
DeMeo stands accused of tax evasion in the amount of $365,000. According to a press release issued by the Department of Justice (DOJ), charges were filed in the United States District Court for the Eastern District of New York in October after being announced by James Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and William J. Muller, Executive Assistant United States Attorney for the Eastern District of New York.
“Regardless of your occupation,” said Robnett, “we Americans all must file and pay our income taxes. The allegations of tax evasion spelled out in this indictment are what IRS Criminal Investigation Special Agents have been investigating for almost 100 years.”
Echoing Robnett’s warning, Muller stated, “Tax crimes like those charged in the indictment harm our government and every American citizen. Organized crime members are on notice that this Office and its law enforcement partners will hold them accountable for such economic crimes no less than for their traditional schemes and offenses.”
According to information contained in the indictment, the tax evasion scheme began with transactions carried out in 2013 and 2014, when DeMeo made over $2 million in capital gains by selling shares in high-value Brooklyn real estate. However, instead of reporting the income to the IRS as required by the federal tax code, DeMeo then took a series of actions intended to hide the income from the Service.
For instance, rather than depositing the funds into any of his multiple bank accounts, DeMeo endorsed two checks, together accounting for half of the sale proceeds, to a plumbing company with which DeMeo had no business ties. Records indicate that DeMeo also endorsed a third check for roughly $355,944 to the owner a check-cashing service. This individual then proceeded to withdraw five cashier’s checks, which were subsequently cashed at a licensed check-cashing company. In addition, after selling his shares, DeMeo allegedly told his lawyer to issue the shares in a series of eight checks, divided unevenly between the first transaction in 2013 and second transaction in 2014. Through this series of actions, DeMeo managed to avoid paying more than $365,000 in taxes.
DeMeo was arraigned, an early stage of the criminal judicial process in which charges are formally read to the defendant, on October 13 before United States Magistrate Judge Robert M. Levy. Bail was reportedly set at $2 million. Prosecution of DeMeo, the case against whom is being managed by the U.S. Attorney’s Office’s Organized Crime and Gangs Section, is being led by Assistant United States Attorney Elizabeth Geddes.
Concealing more than $2 million in income is a certain way to invite criminal tax prosecution. However, acts of suspected tax evasion needn’t be so flagrant or vast in scope to attract the notice of the IRS. Due to the increasing sophistication of financial software and auditing techniques, it is becoming ever easier for IRS agents to detect the commission of tax crimes and noncompliance – and in some cases, the taxpayer may not even be aware that he or she is in violation of the U.S. Tax Code.
Whether a taxpayer acts fraudulently or negligently, failures to disclose domestic or foreign income can result in serious civil or criminal penalties. Civil penalties for failure to file taxes or pay taxes may include debilitating fines amounting to tens or hundreds of thousands of dollars, while criminal consequences include fines, prison time, and a damaging criminal record.
If you are concerned about a possible failure to comply with U.S. Tax Code or IRS regulations, such as failure to file an income tax return, failure to pay taxes, or failure to file an FBAR and report foreign income under the Foreign Account Tax Compliance Act (FATCA), it is in your best interests to seek guidance from a skilled and experienced tax attorney immediately. For a reduced-rate consultation concerning an IRS audit, IRS criminal investigation, or general tax compliance guidance, contact the Tax Law Office of David W. Klasing at (800) 681-1295, or by using our online form. Our San Bernardino tax attorneys have over 20 years of experience providing meticulous tax guidance and aggressive legal representation for taxpayers in California and beyond, including U.S. citizens abroad.
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