Westchester businessman Selim “Sam” Zherka was indicted by a federal grand jury in White Plains on charges of tax fraud, wire fraud, witness tampering and submitting false loan applications to banks.
Zherka, the owner of the Westchester Guardian weekly newspaper who also owns two Manhattan strip clubs, was arrested Thursday afternoon.
“As alleged, Zherka”™s entrepreneurship got a little too creative when he began fabricating loan applications, among many other things,” said, George Venizelos, assistant FBI director, in a statement. “Zherka”™s web of deception knew few bounds. Today he finds himself under arrest and on the wrong side of the law.”
The government filed a motion for Zherka to be jailed through trial, arguing that he is a flight risk and a danger to the community. It cited previous arrests on charges including assault, harassment and weapons possession between 1994 and 2008. According to the memo filed by the U.S. attorney”™s office, Zherka has never been convicted of a crime.
According to the 35-count federal indictment, from November 2005 through 2008, Zherka obtained a total of more than $146 million in loans from three banks ”” North Fork Bank (now Capital One), Sovereign Bank (now Santander) and Signature Bank ”” for the purchase and/or refinancing of apartment house complexes in New England, Tennessee, New Jersey and New York. Zherka allegedly lied about the purchase prices of the real estate he was acquiring, the amount of the down payments, his assets, his income, his tax returns, and the nature and circumstances of a 2000 civil court judgment against him for assault and breach of contract (which, to date, he has not paid).
Additionally, the indictment charges Zherka with engaging in a decadelong tax fraud scheme. Authorities charged Zherka with repeatedly submitting fraudulent tax returns to the IRS that overstated depreciation expenses and understated his capital gains on tax returns for the real estate holding companies in which he was a partner and which, in turn, owned the above apartment house complexes, thereby reducing their tax liabilities. The indictment also charges that Zherka obstructed the IRS by, among other means, failing to file personal tax returns for more than a decade.
For each of the 11 counts of submitting a false loan application, Zherka, if convicted, faces 30 years in prison and a $1 million fine; for the count of wire fraud and the count of witness tampering, 20 years in prison and a $250,000 fine; for the count of conspiracy to obstruct the IRS and violate tax laws, five years in prison and a $250,000 fine; and for each of the 10 counts of making/subscribing to false returns, the 10 counts of aiding/assisting in the preparation of false tax returns and the count of attempting to interfere with the administration of internal revenue laws, three years in prison and a $250,000 fine. If Zherka is convicted, the fine amounts could be changed to reflect gains or losses resulting from the crimes. Additionally, he faces potential criminal forfeitures totaling $146 million, restitution and the costs of prosecution.
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