United States v. Acting Special Agent in Charge of Irs-Ci New York Field Office, et al.

Press Release U.S. Attorney Announces Indictment Charging Former President And Bookkeeper Of Moving Company With Multimillion-Dollar Payroll Tax Fraud Scheme, And Related Guilty Pleas Wednesday, October 20, 2021 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, United States Attorney for the Southern District of New York, and Thomas Fattorusso, Acting Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of a federal Indictment charging JOSEPH EUGENE LEMAY, a/k/a “Gene Lemay,” and JOEL LINGAT with criminal tax offenses. LEMAY is the former president of a company that provides moving and storage services (“Company-1”), and LINGAT is Company-1’s bookkeeper. LEMAY and LINGAT are alleged to have conspired to perpetrate a long-running scheme to evade more than approximately $7.8 million in federal payroll taxes owed by Company-1 and affiliated companies to the Internal Revenue Service (“IRS”). LEMAY is also alleged to have evaded his personal income taxes. LINGAT was previously arrested in this case; LEMAY self-surrendered to the federal courthouse today and is expected to be presented on the charges in the Indictment this afternoon. The case is assigned to U.S. District Judge Mary Kay Vyskocil. Mr. Williams and Mr. Fattorusso also announced today the previously entered guilty pleas of SALMAN RAMI HAIM, former president of Company-1, and NISSIM FADIDA, current President of Company-1. Both HAIM and FADIDA previously admitted to participating in the payroll tax fraud conspiracy while employed by Company-1. The case against HAIM and FADIDA is assigned to U.S. District Judge Ronnie Abrams. U.S. Attorney Damian Williams said: “As alleged, Gene Lemay and Joel Lingat conspired to defraud the United States and evade nearly $8 million in payroll taxes by creating sham companies and making it appear as though their company’s employees were actually employed by these fictitious companies. Lemay is also alleged to have engaged in criminal chicanery to evade personal income taxes. Now both men face federal charges for their alleged crimes.” IRS-CI Acting Special Agent in Charge Fattorusso said: “Mr. Lemay and Mr. Lingat today stand accused of participating in a long-running conspiracy to hide millions of dollars in payroll from the IRS. This allegedly cost the American taxpayer millions of dollars in lost tax revenue. As alleged, these men, with others, went through extraordinary lengths to hide the money through a series of completely bogus companies. Today’s indictment, alongside the just announced guilty pleas of Mr. Haim and Mr. Fadida for their own roles in this scheme, demonstrate that IRS Criminal Investigation will continually endeavor to ensure honest taxpayers are protected from these types of criminal abuses.” According to the allegations in the Indictment unsealed today and the criminal complaint previously filed against LINGAT (where LEMAY is identified as CC-1):[1] From in or about 2010 through in or about December 2016, LEMAY, LINGAT, and other co-conspirators perpetrated a scheme to defraud the U.S. government of payroll and income taxes due and owing to the IRS by Company-1 and affiliated companies. As part of the criminal scheme, LEMAY, LINGAT, and their co-conspirators created sham companies, nominally owned by close associates or family members of LEMAY or others at Company-1; assigned (on paper only) foremen and movers working for Company-1 to the sham companies; and fraudulently made it appear that the sham companies were independent contractors, including by creating fake invoices by which the sham companies purportedly billed Company-1 for labor. Because the conspirators fraudulently made it appear that the labor was performed by independent contractors, Company-1 was able to deduct the cost of the labor as an expense on its tax returns, without withholding or paying over any payroll taxes to the IRS. Through the criminal scheme, Company-1 and affiliated companies evaded in excess of approximately $7.8 million in payroll taxes, including FICA and Medicare contributions, during the charged period. LEMAY is also alleged to have evaded personal income taxes by receiving substantial personal income through an entity called GM3 Enterprises Inc (“GM3”); fraudulently deducting substantial personal expenses paid through GM3 as business expenses on GM3’s corporate tax returns; and significantly underreporting his true income and resulting tax liabilities on his personal tax returns, which LEMAY caused to be prepared and filed with the IRS. LEMAY, 61, of Delray Beach, Florida, and LINGAT, 61, of Jersey City, New Jersey, are charged with one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison. LEMAY is also charged with two counts of tax evasion for the tax years 2014 and 2015, each of which also carry a maximum sentence of five years in person. The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. * * * Also announced today were the previously entered guilty pleas of SALMAN RAMI HAIM, former president of Company-1, and NISSIM FADIDA, current president of Company-1. As part of their guilty pleas, HAIM and FADIDA both admitted to participating in the payroll tax fraud conspiracy while employed at Company-1. HAIM, 46, of Jersey City, New Jersey, pled guilty on May 9, 2019, before U.S. Magistrate Judge Ona T. Wang to one count of conspiring to fail to collect or pay over payroll taxes between approximately 2001 and 2016, in violation of 18 U.S.C. § 371, which carries a maximum sentence of five years in prison; one count of tax evasion for the tax years 2009 through 2016, in violation of 26 U.S.C. § 7201, which carries a maximum sentence of five years in prison; and one count of conspiring to produce false identification documents, in violation of 18 U.S.C. § 1028, which carries a maximum sentence of 15 years in prison. FADIDA, 45, of East Brunswick, New Jersey, pled guilty on October 15, 2021, before U.S. District Judge Ronnie Abrams to one count of conspiring to defraud the IRS between approximately 2005 and December 2016, in violation of 18 U.S.C. § 371, which carries a maximum sentence of five years in prison; and one count of tax evasion for the tax years 2010 through 2013, in violation of 26 U.S.C. § 7201, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Mr. Williams praised the outstanding investigative work of the IRS-CI. This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Jilan Kamal, Katherine Reilly, and Olga I. Zverovich are in charge of the prosecution. [1]Links to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. As the introductory phase signifies, the entirety of the text of the Indictment and the criminal complaint, and the description of the Indictment and criminal complaint set forth below, constitute only allegations, and every fact described should be treated as an allegation. Contact [email protected] [email protected] (212) 637-2600 Updated October 20, 2021 Topic Tax Component USAO - New York, Southern Press Release Number: 21-293

Press Release U.S. Attorney Announces Indictment Charging Former President And Bookkeeper Of Moving Company With Multimillion-Dollar Payroll Tax Fraud Scheme, And Related Guilty Pleas Wednesday, October 20, 2021 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, United States Attorney for the Southern District of New York, and Thomas Fattorusso, Acting Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of a federal Indictment charging JOSEPH EUGENE LEMAY, a/k/a “Gene Lemay,” and JOEL LINGAT with criminal tax offenses. LEMAY is the former president of a company that provides moving and storage services (“Company-1”), and LINGAT is Company-1’s bookkeeper. LEMAY and LINGAT are alleged to have conspired to perpetrate a long-running scheme to evade more than approximately $7.8 million in federal payroll taxes owed by Company-1 and affiliated companies to the Internal Revenue Service (“IRS”). LEMAY is also alleged to have evaded his personal income taxes. LINGAT was previously arrested in this case; LEMAY self-surrendered to the federal courthouse today and is expected to be presented on the charges in the Indictment this afternoon. The case is assigned to U.S. District Judge Mary Kay Vyskocil. Mr. Williams and Mr. Fattorusso also announced today the previously entered guilty pleas of SALMAN RAMI HAIM, former president of Company-1, and NISSIM FADIDA, current President of Company-1. Both HAIM and FADIDA previously admitted to participating in the payroll tax fraud conspiracy while employed by Company-1. The case against HAIM and FADIDA is assigned to U.S. District Judge Ronnie Abrams. U.S. Attorney Damian Williams said: “As alleged, Gene Lemay and Joel Lingat conspired to defraud the United States and evade nearly $8 million in payroll taxes by creating sham companies and making it appear as though their company’s employees were actually employed by these fictitious companies. Lemay is also alleged to have engaged in criminal chicanery to evade personal income taxes. Now both men face federal charges for their alleged crimes.” IRS-CI Acting Special Agent in Charge Fattorusso said: “Mr. Lemay and Mr. Lingat today stand accused of participating in a long-running conspiracy to hide millions of dollars in payroll from the IRS. This allegedly cost the American taxpayer millions of dollars in lost tax revenue. As alleged, these men, with others, went through extraordinary lengths to hide the money through a series of completely bogus companies. Today’s indictment, alongside the just announced guilty pleas of Mr. Haim and Mr. Fadida for their own roles in this scheme, demonstrate that IRS Criminal Investigation will continually endeavor to ensure honest taxpayers are protected from these types of criminal abuses.” According to the allegations in the Indictment unsealed today and the criminal complaint previously filed against LINGAT (where LEMAY is identified as CC-1):[1] From in or about 2010 through in or about December 2016, LEMAY, LINGAT, and other co-conspirators perpetrated a scheme to defraud the U.S. government of payroll and income taxes due and owing to the IRS by Company-1 and affiliated companies. As part of the criminal scheme, LEMAY, LINGAT, and their co-conspirators created sham companies, nominally owned by close associates or family members of LEMAY or others at Company-1; assigned (on paper only) foremen and movers working for Company-1 to the sham companies; and fraudulently made it appear that the sham companies were independent contractors, including by creating fake invoices by which the sham companies purportedly billed Company-1 for labor. Because the conspirators fraudulently made it appear that the labor was performed by independent contractors, Company-1 was able to deduct the cost of the labor as an expense on its tax returns, without withholding or paying over any payroll taxes to the IRS. Through the criminal scheme, Company-1 and affiliated companies evaded in excess of approximately $7.8 million in payroll taxes, including FICA and Medicare contributions, during the charged period. LEMAY is also alleged to have evaded personal income taxes by receiving substantial personal income through an entity called GM3 Enterprises Inc (“GM3”); fraudulently deducting substantial personal expenses paid through GM3 as business expenses on GM3’s corporate tax returns; and significantly underreporting his true income and resulting tax liabilities on his personal tax returns, which LEMAY caused to be prepared and filed with the IRS. LEMAY, 61, of Delray Beach, Florida, and LINGAT, 61, of Jersey City, New Jersey, are charged with one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison. LEMAY is also charged with two counts of tax evasion for the tax years 2014 and 2015, each of which also carry a maximum sentence of five years in person. The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. * * * Also announced today were the previously entered guilty pleas of SALMAN RAMI HAIM, former president of Company-1, and NISSIM FADIDA, current president of Company-1. As part of their guilty pleas, HAIM and FADIDA both admitted to participating in the payroll tax fraud conspiracy while employed at Company-1. HAIM, 46, of Jersey City, New Jersey, pled guilty on May 9, 2019, before U.S. Magistrate Judge Ona T. Wang to one count of conspiring to fail to collect or pay over payroll taxes between approximately 2001 and 2016, in violation of 18 U.S.C. § 371, which carries a maximum sentence of five years in prison; one count of tax evasion for the tax years 2009 through 2016, in violation of 26 U.S.C. § 7201, which carries a maximum sentence of five years in prison; and one count of conspiring to produce false identification documents, in violation of 18 U.S.C. § 1028, which carries a maximum sentence of 15 years in prison. FADIDA, 45, of East Brunswick, New Jersey, pled guilty on October 15, 2021, before U.S. District Judge Ronnie Abrams to one count of conspiring to defraud the IRS between approximately 2005 and December 2016, in violation of 18 U.S.C. § 371, which carries a maximum sentence of five years in prison; and one count of tax evasion for the tax years 2010 through 2013, in violation of 26 U.S.C. § 7201, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Mr. Williams praised the outstanding investigative work of the IRS-CI. This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Jilan Kamal, Katherine Reilly, and Olga I. Zverovich are in charge of the prosecution. [1]Links to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. As the introductory phase signifies, the entirety of the text of the Indictment and the criminal complaint, and the description of the Indictment and criminal complaint set forth below, constitute only allegations, and every fact described should be treated as an allegation. Contact [email protected] [email protected] (212) 637-2600 Updated October 20, 2021 Topic Tax Component USAO - New York, Southern Press Release Number: 21-293