Home Courts Bronxville man pleads guilty to $2.8M tax fraud

Bronxville man pleads guilty to $2.8M tax fraud

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A Bronxville resident has pleaded guilty to criminal tax fraud for not paying more than $2.8 million in state income taxes and penalties.

David A. Walsh, 58, and his wife, Gia A. Walsh, 51, were ranked 44th on the New York State Department of Taxation list of the top 250 delinquent taxpayers, when they were arrested a year ago.

They pleaded not guilty in September 2018 to three counts of criminal tax fraud.

Walsh has paid back $2.24 million to the state, and he could pay back the remaining $573,259 in penalties and interest before he is sentenced on Dec. 6, according to the state tax office.

Walsh will be sentenced to five years of probation, according to Cecilia Walsh, spokeswoman for Albany County District Attorney P. David Soares, who handled the case. The case against Gia Walsh is pending, and she is scheduled to appear in Albany Supreme Court on the same day her husband is sentenced.

The Bronxville couple is also facing other demands on their assets.

Six federal tax liens, totaling nearly $5.6 million have been filed against them for unpaid income taxes from 2008 to 2016. The total does not reflect any payments they could have made.

ES Ventures One LLC has been trying for nearly four years to collect a judgment against the Walshes. The couple defaulted in 2015 on a mortgage on an East Hampton mansion, on which they reportedly owed $10.5 million.

ES Ventures One bought the property at auction, but the Walshes refused to vacate for three months. An East Hampton court awarded $350,000 to ES Ventures for the use and occupancy of the mansion during the prime summer season.

The Walshes have enjoyed better times.

Gia Walsh co-founded GIGI Films and has worked as an independent filmmaker and producer.

David Walsh built and operated global telecommunications companies, according to a 2007 press release from One Equity Partners, a merchant banking arm of JPMorgan Chase. He was a partner with One Equity Partners until 2013.

He served as chairman and chief executive officer of Genband, an IP infrastructure company, until 2017 when it was acquired by Sonus Network. He was kept on as a salaried employee until this past January, and then hired as a consultant for $300,000, according to an Oct. 9 affidavit by Gia Walsh. He began receiving $50,000 a month in August, in severance payments that will end in March.

It is unclear from public records when or why the Walshes finances went bad.

The East Hampton judgment was recorded in Westchester County in 2016.

The couple have produced eight personal tax returns for the lawsuit. Their adjusted gross income was $4.7 million in 2016 and nearly $5.1 million in 2017.

“What happened to this money?” ES Ventures attorney Christopher Renke asks in a document filed Oct. 7. “In what bank account was it deposited? Was this money spent and, if so, on what? Where is this money today? What did the respondents earn in 2018? What have the respondents earned in 2019 to date?”

They have no credit cards or charge cards. Their home is in foreclosure and their home owners insurance was canceled two months ago, Gia Walsh stated in the Oct. 9 affidavit. They have no pension, annuity, retirement fund or 401(k). Other than shares in Genband, they own no stocks, bonds, mutual funds, securities or commodities.

On May 30, Westchester Supreme Court Justice Terry Jane Ruderman found the Walshes in contempt for repeatedly failing to produce subpoenaed documents. She authorized ES Ventures to apply for an arrest warrant if the couple failed to produce records by June 20 and appear for deposition by June 27.

They failed to do so.

“This is obviously a game to (the Walshes),” Renke said in his Oct. 7 filing, “and a clear indication that they are willfully refusing to provide information and documents regarding any and all sources of income and assets.”

The court “should show them no leniency,” Renke states, and should immediately issue a warrant for their arrests.

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