Anyone who plans on breaking the law in New York? Make sure you get caught by New York’s law enforcement and not the federal authorities. While the city and state make shake you down for money before sending you on your way, the ‘federales’ put people behind bars.
Look at the case of former Congressman Michael Grimm and compare it with the people who were arrested in New York City for not paying sales tax.
Michael Grimm
Grimm was an elected official. He represented New York 13th and 11th congressional district and was the only Republican to represent a large portion of New York City. That seemed to give him a special spot inside the legal system. The laws of America are supposed to be applied even-handed, across the board. While some believe an angel gets its wings each time a politician goes to jail and that may be the case with Grimm, a well-regarded Republican from Staten Island.
Grimm liked to play games with sales and payroll taxes from his restaurant — Healthalicious.
In April 2014, the case’s information was finally made public. The Brooklyn US Attorney’s Office released sentencing documents which resulted from a plea agreement between Grimm and the government.
According to the court record, Grimm ran schemes to under-report the real amount of the eateries’ earnings and the wages he paid his workers. The result was fraudulently lowering the taxes due and the value of workers’ compensation premiums the restaurant owed.
The indicted included 22-counts which pointed to Grimm concealing over $900,000 in receipts. The federal and state tax authorities were not too pleased when Grimm scammed the old-fashioned way — by manipulating the books and putting cash into his pockets.
Grimm, who had once been an FBI agent was mad, and the feds wanted him to make restitution and spend up to 30 months in jail.
Grimm was released on May 20, 2016, having served just seven months.
High-Tech Version of Grimm’s Scam
Several Cyrus Vance, Manhattan’s district attorney, charged eight people for a high-tech version of Grimm’s con.
Instead of merely pocketing cash and slicing off profits seven people in the group used high-tech cash registers, called zappers. The 8th individual sold the equipment to the seven businessmen.
Each of the merchants pleaded guilty and admitted to underreporting over two-million in sales tax. In one instance, one month of record sales was reduced by more than $100,000.
What punishment did the restaurant owners get? Vance’s people never said, but it wasn’t jail.
Crimes Against Revenue Program
CARP, Crimes Against Revenue Program, was begun in 2004. A person caught cheating the city and state out of money has to reimburse the stolen money as well as pay a healthy fine.
While Vance’s office would comment on the financial penalties, the plea agreements were sealed. Possibly someone was paid off.
Under New York’s law, the DA’s office gets a piece of the action in a case involving zappers. Every district attorney in the state is motivated to find cheaters because of the cash they stand to get.
Shakedown?
It may be too mean to call this an old-fashioned shakedown, but that’s what it is. No one usually cares how hard white-collar criminals are shaken.
CARP benefits the crooks as well as the DAs. The fines are typically levied against the corporation, so when all is said and done no individual’s reputation gets sullied.
So why doesn’t New York pursue charges? State law is often hazy on crimes resulting from the latest technology and state legislators are busy committing their own crimes. They have little time to be concerned about making the law catch up with technology.
The Takeaway
Everything considered the 7 restaurant owner and one salesman got a better deal than what Grimm got.
