Don’t mess with taxes: Accountant pleads guilty to tax evasion and obstruction offenses
Kristina O'Connell, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that Louis DeMaio of Guilford, waived his right to be indicted and pleaded guilty yesterday before U.S. District Judge Janet Bond Arterton to tax evasion and obstruction offenses.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, DeMaio was employed as an accountant in East Haven and, from approximately 2010 to 2018, also operated Almatt LLC, a temporary employment agency that provided day laborers to construction companies. Although DeMaio listed an individual ("Individual A") on paper as the owner of Almatt, Almatt was effectively owned and run by DeMaio.
As part of Almatt's operating procedures, Almatt invoiced construction companies for the cost of labor provided and, from the payments received from the companies, paid the employees for services rendered. Almatt and DeMaio then provided the employees with W-2 forms reflecting that Almatt had undertaken required federal tax withholdings. However, Almatt and DeMaio failed to withhold taxes and subsequently failed to pay over those withholdings to the IRS. Almatt also never filed yearly income tax returns or quarterly 941 forms reflecting federal withholding and payroll taxes owed.
In addition, DeMaio issued hundreds of thousands of dollars of checks from Almatt made out to himself and to family members who did not work at the business. From 2010 through 2018, DeMaio and his family received more than $2.5 million from Almatt. DeMaio failed to report any of these distributions on his federal personal income tax returns.
In 2015, the IRS initiated a civil examination of Almatt, and then expanded the examination to evaluate the completeness of DeMaio's personal income tax returns. When the IRS confronted DeMaio about his failure to report income paid to him by Almatt, DeMaio fabricated a story that a substantial portion of the payments he received from Almatt were loan repayments from Individual A. DeMaio also provided an IRS revenue agent with a false notarized document that DeMaio had created to support his story. When the civil investigation was referred to IRS Criminal Investigation, DeMaio confirmed the fake loan repayment story in an interview with IRS special agents.
The tax loss as a result of DeMaio's criminal conduct is $1,132,398. DeMaio has agreed to pay full restitution, as well as interest and penalties.
DeMaio pleaded guilty to one count of tax evasion, which carries a maximum term of imprisonment of five years, and one count of obstructing and impeding the due administration of Internal Revenue laws, which carries a maximum term of imprisonment of three years. Judge Arterton scheduled sentencing for November 3, 2020.
DeMaio is released on a $100,000 bond pending sentencing.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.