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New York: Failure to Pay Sales Tax Puts Man In Prison


A restaurateur in New York City “…is headed to prison for cheating the state out of almost a half-million dollars in sales taxes.”

Nicholas Rotundo, owner of FireBird, an ornate Russian restaurant in New York’s theater district was sentenced to one to three years in prison. According to My Fox News, “The 47-year-old manager and part-owner of Firebird pleaded guilty last month to tax fraud.”

The state found that Rotundo “…collected but didn’t pay the state about $447,000 in sales tax. Prosecutors say he also didn’t withhold enough in state taxes from employees’ paychecks, falling short by about $80,000.”

Total fees and penalties alone added up to “…more than $865,000 in taxes and fines.”

According to the New York County District Attorney’s Office, “…ROTUNDO, pled guilty to Grand Larceny in the Second Degree and Criminal Tax Fraud in the Third Degree. As a condition of his plea agreement, ROTUNDO paid approximately $690,000 on the behalf of Firebird for outstanding New York State and New York City sales taxes, accrued interest and applicable penalties. He also paid approximately $127,600 in withholding tax liability, and approximately $27,650 in outstanding unemployment insurance tax liability. He was also order [sic] to pay a $20,000 criminal fine.”

Manhattan District Attorney Cyrus Vance said, “His crimes placed an unfair burden on business owners, who expect and deserve a level playing field. My Office’s Money Laundering and Tax Crimes Unit will continue to investigate and prosecute those who cheat our tax system for their personal benefit.”

A NorthJersey.com article reports, “Defense lawyer James Drucker (DROO’-kuhr) says the restaurant was strapped because of the rocky economy in recent years but is now on an upswing and caught up on taxes.”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”