New York Attorney General Letitia James and New York Commissioner of Taxation and Finance Michael Schmidt on March 26 announced the guilty pleas of two Long Island auto repair shops and their owner for tax evasion.
Broadway Towing, Inc. and Broadway Auto & Towing, Inc. pleaded guilty to criminal tax fraud for underreporting more than $8 million in taxable sales over a 10-year period. The owner of both shops---Luis Crespo, 53 of Freeport---additionally pleaded guilty to petit larceny.
As part of their pleas, the defendants agreed to repay the state of New York more than $900,000 in restitution, interest and penalties.
“There’s no award presented to those who partake in tax evasion, but Broadway Towing’s performance has ensured the company finally pays New York state more than $900,000 in restitution, interest and penalties,” said James. “Today’s convictions should serve as a clear reminder that we will never tolerate those who seek to defraud our state out of its owed tax revenue, especially as we continue to face budget shortfalls.
"The lights have finally dimmed on Broadway Towing’s fraud. I thank Commissioner Schmidt and the Department of Taxation and Finance for their partnership in bringing accountability and justice to our communities.”
“Business owners who tilt the playing field for their own personal gain not only violate the trust of their community, they rob it of critical funding for public programs and services,” said Schmidt. “This is hundreds of thousands of dollars that would have helped improve lives in local neighborhoods, but instead they were siphoned off for personal profit. We’ll continue to work with the attorney general and all levels of law enforcement to ensure those committing tax fraud are held accountable.”
A joint investigation by the Office of the Attorney General’s (OAG) Auto Insurance Fraud Unit and the New York state Department of Taxation and Finance’s (Tax Department) Criminal Investigations Division revealed, between 2009 and 2018, Crespo collectively underreported a total of more than $8 million in taxable sales, and failed to remit more than $700,000 in sales tax collected from his two auto body repair shops, both located at 25 Broadway in Freeport.
According to complaints filed in Nassau County Court and a Tax Department audit of sales tax returns, for the period between Dec. 1, 2009, and Feb. 28, 2018, Broadway Towing underreported its taxable sales by $5,414,789, resulting in a failure to remit $467,025 in sales tax due to New York state.
The Tax Department’s audit further revealed, between Dec. 1, 2009 and Nov. 30, 2016, Broadway Auto & Towing underreported its taxable sales by $3,150,930, resulting in a failure to remit $271,767 in sales tax due to New York state.
On March 26, before the Honorable Terence P. Murphy in Nassau County First District Court, Broadway Towing and Broadway Auto & Towing each pleaded guilty to one count of criminal tax fraud in the third degree, a Class D felony.
Crespo, who has already paid $160,000 in restitution to the Tax Department to date, pleaded guilty to petit larceny, a Class A misdemeanor, and was sentenced to a three-year conditional discharge. As part of his sentence, Crespo must pay an additional $750,000 in restitution to the Tax Department.
The OAG wishes to thank the Tax Department’s Criminal Investigations Division, as well as the New York state Department of Financial Services and the National Insurance Crime Bureau, for their valuable assistance in this investigation.
This case was investigated by Detective John Roman and Senior Auditor Dmitry Temis of the Auto Insurance Fraud Unit, under the direction of Supervising Detectives Edward Keegan and Natalie Shifrin and Deputy Chief Leonard D'Alessandro. The Investigations Bureau is led by Chief Oliver Pu-Folkes.
This case was prosecuted by Assistant Attorney General Zoila Del Castillo of the Criminal Enforcement and Financial Crimes Bureau and Assistant Attorney General Cheryl J. Lee of the Poughkeepsie Regional Office, with the assistance of Deputy Supervising Analyst Jayleen Garcia and Supervising Legal Analyst Paul Strocko.
The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph G. D’Arrigo.
Both the Criminal Enforcement and Financial Crimes Bureau and the Investigations Bureau are part of the Division for Criminal Justice, led by Chief Deputy Attorney General José Maldonado.
The Poughkeepsie Regional Office is led by Assistant Attorney General In-Charge Vinita Kamath, and is a part of the Division for Regional Affairs, which is led by Deputy Attorney General for Regional Affairs Jill Faber. Both the Division for Criminal Justice and Division for Regional Affairs are overseen by First Deputy Attorney General Jennifer Levy.
Source: New York State Office of the Attorney General
