A Rockland businessman who evaded nearly $274,000 in federal income taxes on personal income of $1 million that was concealed from the IRS has been sentenced to a year of supervised release and fined $10,000.
Michael Maroff, of Pomona, pleaded guilty last October to aiding and assisting in the preparation of fraudulent tax returns from 2017 through 2019 by diverting business income to himself.
U.S. District Judge Philip M. Halpern specified on May 1 that eight months of the year of supervised released will be served in home confinement, with electronic monitoring if necessary, and permission to leave home for employment, medical care and religious services.
Maroff’s business income from General Home Systems Corp. and Monroe Commercial Properties LLC was supposed to be reported on corporate tax returns and then transferred to his personal tax returns. Instead, he directed customers and tenants to write checks to him and his wife, according to court records, and he underreported the business’ income.
Under a plea deal, he agreed to a potential prison sentence of 12 to 18 months.
His defense attorney, Michelle Merola, recommended probation or home confinement.
Maroff has paid back the taxes and will pay a penalty and interest, she noted in a sentencing memorandum.
Sometimes he deposited checks in the wrong account. On other occasions he cashed checks made out to him personally but used the money to pay vendors who preferred cash.
As time went on, he did not track some of the transactions, she stated, and they were not reflected in business bank records. When his tax preparer moved to Israel, their in-person tax preparation meetings were discontinued and Maroff failed to discuss how he tracked business receipts.
Maroff also made a deal to sell General Home Systems Corp. for $1.5 million but the buyer paid only $416,000, thus jeopardizing Maroff’s planned retirement income.
Merola emphasized Maroff’s strong work ethic, family bonds, and poor health. The criminal conduct, she said, was “incongruent with the balance of Mr. Maroff’s life.”
Assistant prosecutors Kingdar Prussien and James McMahon recommended 12 to 18 months in prison and a fine of up to $55,000.
The scheme was simple yet brazen, they stated in a letter to the judge, and “required countless lies and repeated acts.”
Yet the sentencing memo from Maroff’s attorney “reads as though he accidentally directed customers and tenants to make checks out to him” and he “accidentally forgot to inform his tax preparer of this conduct.”
Maroff was not forgetful, they said. He “perpetrated his crimes over and over again for more than four years in order to enrich himself.”
