States Attorney's Office District of Connecticut
|September 8, 2010||
HEALTHCARE COMPANY OWNER ADMITS EVADING PAYMENT OF MORE THAN $1 MILLION IN WITHHOLDINGS, PAYROLL TAXES
David B. Fein, United States Attorney for the District of Connecticut, today announced that JOHN DURANTE, 50, of Old Saybrook, pleaded yesterday, September 7, before United States District Judge Vanessa L. Bryant in Hartford to one count of tax evasion stemming from a multi-year scheme to evade payment of employee withholdings and other payroll taxes to the Internal Revenue Service.
According to court documents and statements made in court, between 1994 and 2001, DURANTE had involvement in the operation of several small healthcare businesses in Connecticut, including Special Attention Home Health Care Inc. (“SA Health Care”) and Special Attention Health Services (“SA Health Services”), which repeatedly failed to pay corporate income and payroll taxes including employee tax withholdings identified on the Employer’s Quarterly Federal Tax Returns (“Form 941”), unemployment taxes identified on the Employer's Annual Federal Unemployment Tax Return (“Form 940”), and income tax on the Corporate Income Tax Return (“Form 1120”). In approximately August 2001, the IRS found DURANTE liable as the responsible person for the outstanding withholding and other tax obligations for SA Health Care and SA Health Services and imposed additional penalties and interest. DURANTE was then provided notice of his legal obligation to pay taxes, penalties and interest in the approximate amount of $1.121 million.
In 2001, aware of his payment obligation, DURANTE set up two different companies, South Central Connecticut Home & Health LLC (“South Central Health”) and Shoreline Home & Health LLC (“Shoreline Health”), using nominee owners who were unaware of the existence of the companies. Then, while operating South Central Health and Shoreline Health, DURANTE took significant monies from the entities for his personal use, including to support a longstanding gambling habit.
From 2002 through 2004, South Central Health accurately self-reported its existing applicable employee income tax withholding obligations and the tax it was required to pay under the Federal Insurance Contribution Act (“FICA”) for Social Security and Medicare taxes, and also accurately reported the tax it was required to pay under the Federal Unemployment Tax Act (“FUTA” ) for unemployment insurance. However, South Central Health failed to pay the required taxes in the total amount of approximately $246,759. For approximately three years, DURANTE sought to evade payment of the taxes he owed by continuing to hide his interest in South Central Health, including failing to disclose his ownership interested in South Central Health on his 2003 personal income tax return. DURANTE also continued to hide his interest in Shoreline Health by making false representations to the IRS in an attempt to keep the monies of this entity, his principal ongoing business, from IRS scrutiny and possible seizure. DURANTE withdrew substantial monies from Shoreline Health, including more than $100,000 in checks made out to him or checks made to cash, which he endorsed.
The government contends that DURANTE’s illegal conduct has resulted in a tax loss to the government, including penalties and interest, of more than $1.5 million.
Judge Bryant has scheduled sentencing for November 29, 2010, at which time DURANTE faces a maximum term of imprisonment of five years and a fine of up to approximately $3 million. DURANTE also must cooperate with the IRS to pay all outstanding taxes, penalties and interest.
This case is being investigated by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Christopher W. Schmeisser.
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