Mahopac contractor Eduard Petro has been sentenced to federal prison for 366 days for concealing more than $1.75 million in income to evade taxes.
U.S. District Judge Cathy Seibel also ordered Petro on Jan. 11 to pay $860,972 in restitution and a $7,500 fine.
Petro emigrated from Slovakia 20-some years ago.
“While it is admirable that he took advantage of the opportunity afforded to him in this country and built a successful business,” assistant federal prosecutor Shiva H. Logarajah stated in a sentencing memorandum, “he cheated twice.
“Once, by overstaying his visa and the second time by not reporting over $1.7 million to the U.S. Treasury. Unlike millions of hardworking Americans, the defendant chose to break the law and evade his obligations.”
Logarajah described Petro”™s scheme as a straightforward yet brazen fraud.
He formed NYS Construction Corp. ”“ in 2015 according to a state corporation record ”“ and set it up as a pass-through entity where business income would be reported on his personal tax returns.
The construction company earned substantial income from 2016 to 2018 but Petro did not report all of it. Checks for more than $10,000 were properly deposited and reported, the government said. But checks for lesser amounts were cashed and not recorded on the company books or on Petro”™s tax returns.
On the same day in March 2016, for instance, Signature Roofing of Brooklyn issued a $23,000 check and a $5,000 check for work done on two projects. The larger check was properly reported but the smaller check was not.
The pattern, according to the government, shows awareness of the ban on structuring.
Banks are required to report cash transactions exceeding $10,000 to the IRS, under the 1986 Money Laundering Control Act, and it is a crime to conceal large transactions by breaking them into smaller amounts.
Petro was not charged with structuring. He was accused of and pleaded guilty to subscribing to false income tax returns.
His accountant told him that he must report all business income, according to the sentencing memo. But Petro secretly cashed business checks and gave his accountant false information that resulted in false tax returns that lowered his tax liability.
He concealed income of $1,757,086 and evaded $491,984 in taxes.
The government argued that Petro should be imprisoned for a year-and-a-half to two years.
Petro”™s attorney, Glenn H. Ripa, argued for no prison time. His client had cooperated with the government and agreed to make full restitution, he said in a letter to judge Seibel, and he employs many tradesman.
“If he is incarcerated,” Ripa wrote, “not only will it diminish his ability to pay his full restitution, it will also put a great deal of other innocent employees out of work.”
Ingrid Soltys of Nassau County, a “dear friend” who co-signed Petro”™s $100,000 bail bond last September, also advocated for no prison time in a letter to the judge.
“If you can find it in your heart, please show this kind and gentle man some mercy,” she wrote, “and allow him to be free to work and repay his debt to society.”
The U.S. Probation and Parole office recommended imprisonment for 12 months and 1 day, and that is what the judge ordered, plus supervision for a year after he is released. She ordered Petro to surrender to the Bureau of Prisons on March 13.
