DISTRICT ATTORNEY VANCE RECOVERS MORE THAN $8 MILLION FOR CITY AND STATE IN TAX REVENUES AND CRIMINAL FINES

Manhattan District Attorney Cyrus R. Vance, Jr., announced the guilty pleas of two individuals – a restaurant owner and the owner of a restaurant equipment corporation – in separate tax cases involving members of the food service industry. Collectively, the two defendants have defrauded New York City and New York State of approximately $3.6 million in tax revenue. When coupled with interest, penalties and criminal fines, the total liability amount is $8.2 million, $3 million of which has already been paid by the defendants.

“At a time when New York City is cutting services to make ends meet, the hard work of enforcing the tax laws matters now more than ever,” said District Attorney Vance. “The Manhattan District Attorney’s Office is committed to ensuring that all New Yorkers pay their fair share of taxes. Year after year, the Manhattan DA’s Office returns to the City and State many multiples of its budget. This is thanks to the tireless efforts of our attorneys and support staff, and the assistance of our partners in law enforcement, including the New York State Department of Taxation and Finance and the New York City Department of Finance.”

New York State Department of Taxation and Finance Commissioner Thomas H. Mattox said: “The Department is pleased with the joint investigations that we have been able to work with Manhattan District Attorney Cyrus R. Vance, Jr. and his office. These are just a few of the cases that we have been able to work together and these efforts should send a strong message that consequences await those who violate New York State tax laws. Honest taxpayers lose out when someone evades paying taxes that are owed.  The Department and local prosecutors will continue working diligently to identify those who do not comply with the tax laws and hold them accountable.”

New York City Department of Finance Commissioner David M. Frankel said: “The Department of Finance is going after those who think they can get away with cheating on their taxes while the rest of us play by the rules. When people don’t pay what they are supposed to, it means higher costs or less services for the rest of us. We will continue work with our partners in law enforcement to root these people out and hold them accountable. I want to thank the Mayor’s Office of Special Enforcement, which referred the case for investigation, and DA Vance and his staff for their work prosecuting this case.”

New York City Criminal Justice Coordinator John Feinblatt said: “This prosecution is a great example of how the City uses a multiagency approach to comprehensively root out illegal activity. By having a Department of Finance investigator assigned to the Office of Special Enforcement, the City discovered the fraudulent activity through an illegal hotel inspection and was able to act on the information immediately, leading to this significant indictment.  District Attorney Vance has been a great partner in our continuing efforts and we look forward to continuing our work together.”

In New York State Supreme Court today, RAMESH BHATIA, 64, the owner of a Subway and Papa John’s restaurant in Midtown Manhattan, pleaded guilty to Grand Larceny in the Second Degree and Offering a False Instrument for Filing in the First Degree. According to documents filed in court, BHATIA, the owner of a Subway and Papa John’s restaurant located at 765 Eighth Avenue, admitted to having to having wrongfully withheld approximately $337,000 in sales tax collected from customers of his restaurant from March 2004 through December 2010. This amount represents more than 40 percent of the sales tax collected.  BHATIA also admitted to having filed a false New York City corporate tax return in 2010 that intentionally defrauded the City of approximately $76,000.  BHATIA has agreed to pay sales and corporate taxes related to other entities he owned from 2004 through 2010, bringing his total tax payments to $1,684,372.  Factoring in interest and penalties, BHATIA’s total liability is $3.4 million.  He is expected to be sentenced on December 2, 2011 to 30 consecutive extended weekends in prison, in part due to his immediate and extensive cooperation in the investigation.

On May 25, 2011, MEIR MARKOVITZ, 53, pleaded guilty to Attempted Grand Larceny in the First Degree and City Tax Fraud in the Fourth Degree. According to documents filed in court, the defendant, acting as the sole owner of Daroma Restaurant Equipment Corp., admitted to having failed to turn over more than $1.8 million in New York State and New York City sales tax. This amount represents 90 percent of the tax collected from the business’s customers since 2004. MARKOVITZ also admitted to having filed a false New York City corporate tax return in 2010 that understated the business’s receipts by two-thirds.

At the time of MARKOVITZ’s guilty plea, he paid almost $3 million toward his tax liabilities.  He is expected to pay at least an additional $1 million by the time of his sentencing on September 28, 2011, at which point he is expected to be sentenced to serve 48 consecutive weekends in jail. MARKOVITZ’s acceptance of responsibility at an early stage in the investigation contributed to disposition in this case.

District Attorney Vance thanked Assistant District Attorney Seth Blumenthal of the Money Laundering and Tax Crimes Unit, for handling the prosecution of the BHATIA case, under the supervision of Assistant District Attorney Gilda Mariani, Chief of the Money Laundering and Tax Crimes Unit. Assistant District Attorney Maurice Mathis, Senior Investigative Counsel of the Money Laundering and Tax Crimes Unit, and Assistant District Attorney Mariani, handled the prosecution of the MARKOVITZ case.

Detective Anthony Pasquariello of the District Attorney’s Office Squad assisted in the BHATIA case, while Detective Robert Mistretta, also of the DA’s Office Squad, assisted in the MARKOVITZ case. Finally, Senior Accountant Investigator Irene Serrapica of the Money Laundering and Tax Crimes Unit provided valuable assistance in the BHATIA case. Other members of the staff of Money Laundering and Tax Crimes Unit provided important assistance in both cases.

District Attorney Vance also thanked the New York State Department of Taxation and Finance Commissioner Thomas H. Mattox and Deputy Commissioner for Enforcement Richard S. Ernst; Auditors Ronald Chan, Mukaila Rabiu, and Joseph Karrott; Commissioner David M. Frankel and the New York City Department of Finance; New York City Criminal Justice Coordinator John Feinblatt; New York City Sheriff Edgar A. Domenech; and the staff of the New York City Office of Tax Enforcement.

Defendant Information:

RAMESH BHATIA, D.O.B. 4/08/1946

New York, NY

Convicted:
  • Grand Larceny in the Second Degree, a class C felony, one count
  • Offering a False Instrument for Filing in the First Degree, a class E felony, one count
  •  
MEIR MARKOVITZ, D.O.B. 12/05/1957

New York, NY

Convicted:
  • Attempted Grand Larceny in the First Degree, a class C felony, one count
  • City Tax Fraud in the Fourth Degree, a class E felony, one count

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