Thursday, June 6, 2019
A conviction for misdemeanor larceny drew a two-year suspension from the New York Appellate Division for the Second Judicial Department
By way of background, the respondent’s tax liability stems from his operation of two food court businesses as FreshMex, LLC, and All American Burger, LLC (hereinafter together the LLCs), in a mall located in White Plains, New York. At all times, the respondent was the person responsible for collecting sales tax from customers of the LLCs on behalf of the State of New York, filing sales tax returns, and remitting tax payments to the State. From on or about March 1, 2009, and through January 31, 2015, sales tax was collected from customers of the food court businesses, but no sales tax returns were filed and no sales tax was remitted to the New York State Tax Department. On June 13, 2017, a Superior Court Information was filed in the County Court, Westchester County, under S.C.I. No. 16-1118, charging the respondent and the LLCs with grand larceny in the second degree, in violation of Penal Law § 155.40, and two counts of criminal tax fraud in the third degree, in violation of Tax Law § 1804.
Pursuant to a plea agreement, on July 5, 2017, the LLCs pleaded guilty to grand larceny in the third degree and criminal tax fraud in the third degree, in violation of Penal Law § 155.35 and Tax Law § 1804, respectively, both class D felonies. In view of the pleas entered by the LLCs, and the payment of the total tax of $403,719, the respondent was permitted to enter a misdemeanor plea.
The respondent testified that in or about 2009, he took over a fast food restaurant (Desert Moon Café) in the Westchester Mall. A year later, he opened a second fast food business at that mall (Nathan’s Hot Dogs). Although New York sales tax was collected from customers of those businesses, the respondent admitted that from March 2009 through January 2015, he did not file quarterly sales tax returns and did not pay the collected sales tax to the New York State Tax Department.
The respondent testified that after he was contacted by investigators from the District Attorney’s Office, he paid the principal tax due, both the sales tax and his own tax liability. The respondent reached a plea agreement permitting him to plead guilty to petit larceny, a class A misdemeanor, and he was sentenced, inter alia, to a one-year conditional discharge. The respondent maintains that he cooperated with the criminal justice authorities, and complied with the terms of the plea and sentence. The respondent testified that a final assessment has been made, setting the interest and penalties owed at approximately $400,000 and $800,000, respectively. He intends to start paying these obligations when he is able to do so.
The respondent admitted that not only was his conduct illegal, but it was also morally wrong, and if he was confronted with the same circumstances, he would act differently and close the businesses and figure out a way to pay what he owes. The respondent also described how this experience has been devastating to him and his family, and financially crippling. He expressed remorse for bringing disgrace to his family and to the legal profession.
From March 1, 2009, through January 31, 2015, sales tax was collected from customers of the food court businesses, but the respondent failed to file sales tax returns and remit that tax to the New York State Tax Department. Although the respondent has made restitution of the tax owed, substantial interest and penalties of approximately $1.2 million remain outstanding. We also note, as an aggravating factor, that the respondent’s disciplinary record is not unblemished, as he has received two Admonitions and a Letter of Caution.
He was given credit for time served on an interim suspension. (Mike Frisch)