The former co-owner of a cement and masonry contracting business has been sentenced to two years in prison in a scheme to file false tax returns and illegally structure transactions.
Garry Mullahy, 43, a former co-owner of A+ Restoration Consultants Corp. was sentenced late last month to two years in prison for his role in a conspiracy to file false tax returns and structure cash transactions to evade Treasury Department reporting requirements. He was also ordered to pay restitution of more than $985,000 to the IRS. The sentence was imposed by U.S. District Judge William H. Pauley III after Mullahy and his younger brother pled guilty.
Mullahy and his brother Thomas, 41, owned and operated A+, a Queens-based cement and masonry contractor that operated in the New York City area. The brothers resided in the area as well.
Between 2004 and 2007, the Mullahy brothers admitted, they engaged in a scheme to generate cash derived from customers in such a way that the receipt of the revenue was concealed from A+’s accountants and, ultimately, omitted from the corporate income tax returns filed on behalf of the company. The brothers used a portion of the cash generated to pay employees of A+ in cash so they were not subject to withholding tax. In doing so, the brothers evaded the payment of payroll taxes and filed false payroll tax returns.
The scheme also involved generating fraudulent business expenses, which, in fact, had not been incurred by A+, so as to reduce A+’s taxable income. To execute this scheme, the Mullahys allegedly maintained bank accounts that they concealed from their accountants. Accordingly, the activities in these accounts were not reflected on the corporate income tax returns of A+.
They also illegally structured cash transactions from the accounts they had concealed, by withdrawing cash or cashing checks in amounts equal to or less than $10,000, in order to evade the filing of Currency Transaction Reports with the Department of the Treasury. Finally, the Mullahys allegedly wrote checks from A+ to purported subcontractors that did not, in fact, represent legitimate payments to the subcontractors of expenses, but instead were simply cashed as part of the conspiracy. A+ ceased to do business in approximately late 2007.
“The American tax law is very clear,” said Joseph Foy, a special agent in the IRS Criminal Investigation Division’s New York Field Office. “Every employer is responsible for filing accurate tax returns and following all reporting requirements. Those employers who do not are breaking the law. Each year, over 2,100 people are convicted violating a law in which IRS has jurisdiction. Don’t be one of them. It is not worth the risk.”
Garry Mullahy emigrated to the United States from Ireland and may be subject to deportation when he is released from prison. In imposing his sentence, J Judge Pauley stated that he had “made a very comfortable life here in America,” adding, “we welcomed you and gave you all the benefits equivalent to citizenship and you betrayed that trust.”
His brother Thomas Mullahy pled guilty for his role in the conspiracy before U.S. District Judge Laura Taylor Swain on Oct. 29, 2010. He is scheduled to be sentenced in February. He faces up to five years in prison and three years of supervised release.
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