Home Courts IRS tries to collect $2.5M Colasuonno tax fraud debt

IRS tries to collect $2.5M Colasuonno tax fraud debt

Fourteen years after New Rochelle resident Philip Colasuonno was convicted of tax fraud, the government is still trying to collect the employee payroll taxes he dodged.

Rocco Romeo embezzlerThe U.S. Attorney’s Office sued Colasuonno for nearly $2.5 million, three times more than he was ordered to repay in 2007, on Dec. 20 in U.S. District Court, White Plains.

Colasuonno had pleaded guilty to preparing false tax returns and failure to remit income taxes, Social Security, Medicare and unemployment contributions for employees of American Armored Car Ltd., an Elmsford company he and family members owned.

Colasuonno, then a certified public accountant and one-third owner of the company, was charged as the person responsible for exercising significant control over the finances.

For more than five years, from 2000 to 2005, the company failed to collect or account for quarterly payroll taxes.

“Withholding taxes are not simply a debt,” the new complaint states. “They are part of the employees’ wages, held by the employers in trust for the government.”  Employers “merely surrender that which does not belong to them.”

Colasuonno obscured the company’s obligations by creating false records. He wrote checks to FJC Security Services Inc., a company with whom American Armored Car had no ongoing business relationship and that had no knowledge of the scheme, according to records in the criminal case.

The checks were then cashed at Prima Check Cashing, another Elmsford business owned by Colasuonno and family members. The cash was paid to employees as wages for overtime work but accounted for on the company’s books as payments for outside services.

The prosecutors’ sentencing memorandum in 2007 described several schemes used by the Colasuonno companies and depicted the businesses as “thoroughly infected with criminality.”

Colasuonno was sentenced to 46 months of home confinement and ordered to pay $781,467 in restitution. But he failed to make good faith efforts to pay restitution, according to the new complaint, and in 2011 was sentenced to four months in prison.

Now Colasuonno, 71, is being assessed $2,490,899 in penalties and interest.

Damian Williams, U.S. Attorney for the Southern District of New York, and assistant prosecutor Anthony J. Sun filed the action on behalf of the Internal Revenue Service.

The IRS seeks to reduce the outstanding tax assessments to a judgment, a procedure that is used to extend the collection period when there is no present source of funds to collect.

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