DOJ Announces Sentencing of New York Man for Tax Fraud

"Business owners that use 'off the books' payrolls cheat the U.S. Treasury and take unfair advantage of honest competitors who follow the law and pay their taxes," said Acting Assistant Attorney General Ciraolo. "Today's sentence sends a clear message that the Justice Department is aggressively pursuing and holding accountable those who willfully fail to collect and pay employee withholdings, social security and other required federal employment taxes."

Eric Anderson was sentenced to serve 18 months in prison by U.S. District Judge Arthur D. Spatt. In addition to prison time, Anderson was ordered to serve three years of supervised release and to pay $1,080,222 in restitution to the Internal Revenue Service (IRS). Anderson paid $50,000 towards restitution at his sentencing today.

According to court documents, Anderson owned three construction companies located in Dix Hills: Anderson Framing, Anderson Enterprise and Anderson Trim Specialty. From 2006 through 2008, the defendant used a commercial check cashing service to cash more than $10.5 million in checks paid to his construction companies representing gross receipts of the businesses. Anderson used a portion of the cash to pay his employees "under the table" wages. As the owner, Anderson was responsible for his companies' finances and tax obligations. From 2006 through 2008, Anderson failed to collect or pay over to the IRS the employment taxes that were due quarterly on his employees' cash wages.

Anderson also used a portion of the cash from his businesses for his own personal use. He concealed much of his income from the IRS by filing false corporate and individual federal income tax returns in certain years and failing to file tax returns in other years. In total, Anderson's actions caused a tax loss of more than $1 million to the IRS.

On June 9, 2014, Anderson pleaded guilty to willfully failing to collect and pay over to the IRS employment taxes.

Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Mark Kotila and Jeffrey Bender of the Tax Division, who prosecuted the case. She also thanked the U.S. Attorney's Office of the Eastern District of New York for their assistance.

Additional information about the Tax Division and its enforcement efforts may be found on the division's website.