A pair of Long Island construction contractors have been sentenced to serve prison terms and ordered to pay restitution for engaging in payroll tax schemes.
Arnaldo Goncalves was sentenced on December 17 to 12 months in prison following a plea deal and ordered to pay $334,686, according to court records. Goncalves owned and operated ALG Construction and directed the daily operations of A & R Concrete, both located in Central Islip, N.Y. Both ALG and A & R supplied concrete and materials as well as labor for commercial building projects and residential projects in the New York area.
Goncalves willfully and knowingly failed to collect, account for and pay over to the IRS sufficient FICA taxes knowing that additional FICA taxes were due in the total amount of $316,080.
A relative, Candido Goncalves, owned and operated Nova Concrete, located in Bay Shore, N.Y. On Dec. 10, 2010, he was sentenced to six months imprisonment and three years supervised release. Nova supplied skilled carpenters, rebar installers, and masons for residential building projects in Suffolk County, N.Y.
From 2005 to 2008, Candido Goncalves hid the actual wages paid by in part, a cash payroll funded by checks he diverted from Nova and took to a check cashier, so that the cash did not show on the books of accounts of Nova. He would pay the overtime of the employees in cash. He willfully failed to account for and pay over the FICA taxes due. The amount the checks that he diverted that the government would have been able to prove is approximately $1.3 million causing $169,028 in FICA taxes due.
“IRS Criminal Investigation is constantly developing and investigating employment tax cases involving a wide variety of industries and professions,” said IRS special agent Joseph Foy, a spokesperson in the IRS Criminal Investigation division’s New York Field Office. “Business owners are often surprised to find out the depth of the resources available to us to discover and investigate payroll tax schemes. We work with the Department of Labor, Social Security Administration, Worker’s Compensation, and many other agencies. We receive information from prosecutors, IRS revenue agents and officers, competitors, disgruntled employees, etc. For some business owners, it is too late when someone informs the IRS.”
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