A Rockland County tax evader who helped the government nab another tax cheat now has to pay nearly $11.2 million in restitution.
U.S. District Judge Cathy Seibel ordered Eli Katz, of Monsey, to pay $7.2 million to the IRS, $3.8 million to the New York Department of Taxation and Finance, and $183,715 to eight car dealerships he victimized, on June 9 in White Plains federal court.
Judge Seibel sentenced Katz this past April to one year of supervised release for tax evasion and mail fraud. From 2005 to 2011 he failed to report $23 million in income from operating Katzco Motor Vehicle Service Ltd., in Monsey, and he stole tax payments that out-of-state car dealers gave him to register cars in New York.
Katz was originally charged in 2013, but his case was postponed for 11 years while he secretly worked with the government to build a tax evasion case against former real estate magnate Joseph Neumann, of Monsey.
Neumann failed to report $1.25 million in taxes on income of $3.6 million from 2015 to 2018. Last year, he pleaded guilty to tax evasion and operating an unlicensed money transmitting business. He was sentenced to time served and two years of supervised release, and ordered to pay the IRS $1.3 million.
When Katz was sentenced in April, Judge Seibel ordered him to forfeit assets traceable to the crime: $3.8 million, Rolex and Ebel watches, and a one kilogram gold brick. But the question of restitution – compensating the victims of the crime – was left open.
Seibel ordered Katz to pay a $750,000 lump sum payment in eight months, giving him time to sell his $1.3 million house to cover the payment and leave enough for a new home.
He has to liquidate 80% of his wife’s retirement plan and every month he has to pay at least 15% of his gross income to the government, until restitution is satisfied.
