FOR IMMEDIATE RELEASE
June 13, 2012
NEWARK, N.J. – A Hudson County, N.J., defense attorney who has not filed a personal income tax return since 2000 was sentenced today to 30 months in prison for committing tax crimes in connection with income he received from his law practice, U.S. Attorney Paul J. Fishman announced.
Francis Cutruzzula, 49, of River Vale, N.J., previously pleaded guilty to an Information charging him with two counts of tax evasion and one count of failure to file a tax return. He entered his guilty plea before U.S. District Judge William H. Walls, who also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
A 1988 graduate of Seton Hall Law School, Cutruzzula was admitted to practice law in New Jersey and was the sole proprietor of the Jersey City law practice of Francis S. Cutruzzula, P.A. Despite receiving significant income from his law practice, Cutruzzula has not filed a personal income tax return since calendar year 2000.
Cutruzzula is also the sole owner of FSC Imports, Inc., a domestic corporation purportedly in the business of importing water from Italy. FSC has not filed a corporate income tax return since it was incorporated in 2002.
Cutruzzula maintained four separate bank accounts; an account in the name of Francis S. Cutruzzula,( the “Operating Account”); an account in the name of Francis S. Cutruzzula, P.A., (the “Attorney-Trust account”); an account in the name of Francis S. Cutruzzula, (the “Personal Account”) and an account in the name of FSC Imports, Inc, (the “FSC Account”).
As examples, during calendar years 2005 and 2006, Cutruzzula deposited approximately $364,649 and $481,547, respectively, in total gross receipts from his law practice into the Operating Account, the FSC Account and the Personal Account. On one occasion, Cutruzzula received a check for a client to purchase property in Jersey City. After preparing a fraudulent contract for sale for the client, Cutruzzula deposited the $150,000 check into his Attorney-Trust account, which had been carrying a negative balance. As soon as the deposit was made, Cutruzzula wrote $120,000 in checks on the account and moved the funds to the other three accounts he controlled.
Cutruzzula then wrote checks and made withdrawals totaling approximately $210,145 for 2005 and $259,538 in 2006, spending the money on various personal expenses, including custom-made men’s suits; a men’s Tourneau watch; payments to various luxury resorts, a Disney Vacation Club, and his retirement account; mortgage payments for his personal residence; cash payments to himself; and payments to various personal credit card accounts he used.
Based on his 2005 net taxable income of approximately $181,080, Cutruzzula owed the IRS approximately $68,336 in taxes. Based on his 2006 net taxable income of approximately $315,660, Cutruzzula owed approximately $119,117. Cutruzzula did not file returns either year, nor make any payments on his taxes.
During calendar year 2007, Cutruzzula received total gross income of approximately $296,676 and failed to file a return. Between calendar years 2005 and 2007, Cutruzzula received more than $1.1 million in total gross receipts from his law practice and other sources.
In addition to the prison term, Judge Walls sentenced Cutruzzula to serve three years of supervised release and ordered him to pay $6,000 in fines. Cutruzzula is also required to cooperate fully with the IRS, including filing all delinquent tax returns and paying $238,235 in taxes due.
As part of his guilty plea, Cutruzzula agreed to a voluntary lifetime disbarment from the Bar of the State of New Jersey, which he confirmed by signing a Disbarment by Consent form filed with the New Jersey Supreme Court. This consent to disbarment is an absolute bar to Cutruzzula ever seeking reinstatement to the Bar of the State of New Jersey, and resulted in an order of disbarment and the assessment of disciplinary costs.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation in Newark, under the direction of Acting Special Agent in Charge JoAnn S. Zuniga, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
Defense counsel: Jeffrey Garrigan Esq., Jersey City, N.J.