October 17, 2002

PRESS RELEASE

PROVINCETOWN WOMEN SENTENCED
FOR FILING FALSE TAX RETURN

Boston, MA... A Provincetown woman was sentenced today in federal court for filing a false tax return.

United States Attorney Michael J. Sullivan and Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation, announced today that PHYLLIS SCHLOSBERG, age 63, of 273 Commercial St., Provincetown, Massachusetts and 347 West 57th St., New York, New York, was sentenced by Chief U.S. District Judge William G. Young to 2 years' probation, the first 10 months of which are to be served in home confinement, and a $30,000 fine. SCHLOSBERG was also ordered to pay restitution in the amount of $91,407 to the IRS. SCHLOSBERG pleaded guilty on June 26, 2002 to one count of filing a false tax return.

At the earlier plea hearing, the prosecutor told the Court that had the case proceeded to trial the Government's evidence would have proven that SCHLOSBERG, the owner of the Post Office Cabaret & Café in Provincetown, diverted cash receipts from the café by obtaining cashier's checks from her bank payable to herself which she did not disclose to her tax preparer. SCHLOSBERG used the funds directly or deposited them in another bank account. SCHLOSBERG kept the funds and the bank account concealed from her tax preparer and the proceeds were never reported on SCHLOSBERG's personal tax returns. The prosecutor told the Court that by filing the false tax return for the year 1995, SCHLOSBERG avoided paying $34,045 in taxes. In addition, SCHLOSBERG filed false tax returns in the years 1993 and 1996 and avoided paying taxes of in those years of $35,335 and $22,027, respectively.

The case was investigated by the U.S. Internal Revenue Service. It was prosecuted by Assistant U.S. Attorney Mark J. Balthazard in Sullivan's Economic Crimes Unit.

Press Contact: Samantha Martin, (617) 748-3139