Palm Beach County Lawn Service Owner Pleads Guilty to Employment Tax Fraud and to Filing a False Tax Return
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announced that Michael J. Cioffi, of Loxahatchee, Florida, pled guilty on May 23, 2012 to an Information charging him with one count of failing to truthfully account for and pay payroll taxes, in violation of Title 26, United States Code, Section 7202; and one count of filing a false income tax return, in violation Title 26, United States Code, Section 7206(1). Cioffi also agreed to pay restitution to the IRS in the amount of $537,809.57.
According to the Criminal Information and plea documents filed with the court, the defendant was the sole owner and operator of Mike Cioffi Lawn Service, in Loxahatchee, Florida. Cioffi’s business specialized in large commercial contracts and employed approximately thirty employees per quarter between January 2005 and December 2006. Cioffi was required to collect and truthfully account for and pay to the IRS all income taxes withheld from each employee’s paycheck, as well as all taxes owed on that income pursuant to the Federal Insurance Contributions Act (FICA). FICA taxes are used to fund federal programs for retirees, the disabled, and children of deceased workers, and support Social Security and Medicare. Cioffi was also required to file Employer Quarterly Tax Returns, Forms 941, with the IRS reporting the FICA and income taxes withheld from each employee’s paycheck.
Court documents state that for each quarter during 2005 and 2006, Cioffi paid wages to the employees of Mike Cioffi Lawn Service by check, but knowingly failed to collect, and truthfully account for or pay to the IRS any FICA or income taxes due and owing to the United States on these wages. The defendant also did not file any of the required Employer Quarterly Tax Returns for this period with the IRS.
According to documents filed with the court, for tax year 2006, Cioffi willfully filed with the IRS a United States Individual Income Tax Return, Form 1040, on behalf of himself and his spouse. In an effort to hide income from the IRS and avoid the payment of taxes, Cioffi falsely reported that the gross receipts for Mike Cioffi’s Lawn Service were $782,437, when the defendant knew that gross receipts were actually more than $2 million.
At sentencing, Cioffi faces a maximum statutory penalty of up to 5 years in prison for failing to truthfully account for and pay payroll taxes, and up to 3 years in prison for filing a false tax return. Sentencing is scheduled for October 2, 2012 at 10:30 am in West Palm Beach, FL, before U.S. District Judge Daniel T.K. Hurley.
Mr. Ferrer commended the Internal Revenue Service, Criminal Investigation, for their investigation of this matter. This case is being prosecuted by Assistant U.S. Attorney Stephanie Evans.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.