04-22-04 -- Bruton, Christopher and Badick, Leon -- Sentencing -- News Release

Two Restaurateurs Sentenced to Prison for Payroll and Sales Tax Evasion

NEWARK - Two former shareholders and principals of restaurants in Ramsey, New Jersey and Orangeburg, New York were each sentenced today to 20 months in prison for conspiring to evade approximately $835,800 in payroll and sales taxes between 1993 and 2000, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Harold A. Ackerman also ordered Christopher T. Bruton, 44, of Suffern, N.Y., and Leon Badick, 40, of Congers, N.Y. to each pay a $5,000 fine. The two men were former owner-operators of two restaurants, each named Company B's." They pleaded guilty on Nov. 14 to separate one-count Informations charging conspiracy to evade taxes.

They also must file amended tax returns and are liable for all back taxes, interest and penalties.

Bruton and Badick are free on $100,000 bail until their surrender date of June 7.

"These individuals stand in stark contrast to all other law-abiding, tax-paying citizens," Christie said. "We are pleased with the significant sentences they received, given the magnitude of their tax thievery."

Under U.S. Sentencing Guidelines, Judge Ackerman determined the sentences based on a formula that takes into account the severity and characteristics of the offense and the defendants' criminal history, if any. Parole has been abolished in the federal system. Under the Sentencing Guidelines, defendants who receive custodial terms must serve nearly all that time.

According to the Informations to which they pleaded guilty, the defendants unlawfully concealed and under-reported the total salary and wages paid to the Corporations' employees by approximately $2,792,772 in order to evade approximately $477,407 in payroll taxes.

The defendants also sought to avoid detection of the payroll tax evasion scheme by concealing and retaining approximately $358,397 in sales taxes collected from "Company B's" patrons on behalf of the states of New Jersey and New York. The defendants did this so that the number of employees reported by the corporations for payroll tax purposes would appear to be consistent with their gross receipts reported for sales tax purposes and, thereby, not raise suspicions relative to the evaded payroll taxes.

Christie credited Special Agents of the Criminal Investigation of the IRS, under the direction of Special Agent in Charge Patricia J. Haynes, with developing the cases against Bruton and Badick.

The Government is represented by Assistant U.S. Attorney Lorraine S. Gerson, of the U.S. Attorney's Commercial Crimes Unit in Newark.


Defense Counsel:

for Bruton: Leonard Reed Rosenblatt, Esq. Elizabeth, N.J.

for Badick: Harvey S. Barr, Esq. Spring Valley, N.Y.