Owner Of Castro Valley Pizzeria Charged With Tax Fraud

OAKLAND – Frank Eugene Gemignani, III, was charged by a grand jury on June 19, 2014, with 11 counts of failure to pay employment taxes and one count of filing a false tax return, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the Indictment, from about 1991 through 2012, Gemignani operated Pyzano’s Pizzeria in Castro Valley. As the sole proprietor, Gemignani exercised control over every aspect of Pyzano’s business affairs, including approving payments by the company and controlling its bank accounts. Gemignani was also responsible for collecting, accounting for, and paying to the IRS, payroll taxes withheld from his employees’ paychecks.

According to the Indictment, from April 1, 2008 through Dec. 31, 2010 Gemignani deducted and collected approximately $185,249 in federal income taxes and Federal Insurance Contributions Act taxes (FICA) from Pyzano’s employees’ wages, but failed to pay these taxes to the IRS. Gemignani is also charged with filing a false U.S. Individual Income tax return for 2007.

Gemignani made his initial appearance before the Honorable Donna M. Ryu, United States Magistrate Court Judge, on July 8, 2014, and his Indictment was unsealed at that time.

An Indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum penalty for each count of failure to pay over employment taxes, in violation of Title 26, U.S.C § 7202, is five years in prison, and a fine of $250,000. The maximum penalty for filing a false tax return, in violation of Title 26, U.S.C § 7206(1), is three years in prison, and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.

(Gemignani indictment )