Financial planner arrested, indicted for personal income tax evasion and filing false income tax returns
FOR IMMEDIATE RELEASE
December 1, 2011
NEWARK, N.J. – IRS agents arrested a Branchburg, N.J., man at his residence this morning for allegedly evading federal income taxes and filing false income tax returns for tax years 2001 through 2005, U.S. Attorney Paul J. Fishman announced.
A federal grand jury returned an Indictment yesterday charging Ronald Patetta, 56, with five counts of personal income tax evasion and five counts of filing false income tax returns. He is expected to appear before U.S. Magistrate Judge Joseph A. Dickson for a bail hearing this afternoon in Newark federal court.
According to the Indictment unsealed today:
From 2001 through 2005, Ronald Patetta worked as a financial planner and sold insurance products for a number of different insurance companies. Although the insurance companies paid Patetta wages and commissions of nearly $900,000 during those years, Patetta did not pay any taxes on the income he received. In April 2007, he filed for bankruptcy under Chapter 13 of the U.S. Bankruptcy Code. As required by the Code, Patetta listed his assets and liabilities in his bankruptcy filing. Among his liabilities, he listed approximately $440,000 for past taxes owed to the IRS.
Between July 2006 and October 2006, Patetta filed false income tax returns for the 2001 and 2005 tax years showing he had earned $0 income for those years and owed $0 in taxes. Patetta fabricated IRS-1099 forms, purportedly from various insurance companies, that he attached to his tax returns. These forms falsely showed that the insurance companies paid him $0 income for the years in question.
Throughout the investigation, Patetta took steps to obstruct the IRS. He sent letters and filed court papers challenging the legality of the IRS’ conduct, its legal authority to perform its job, and threatening the IRS with legal action if it persisted. Patetta also sent “cease and desist” letters to the various insurance companies, threatening them with legal action if they complied with any IRS summonses requesting information concerning Patetta.
Each of the five tax evasion counts of the Indictment carries a maximum potential penalty of five years in prison and a $100,000 fine. Each of the five false filing counts of the Indictment carries a maximum potential penalty of three years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, with the investigation leading to the Indictment and arrest.
The government is represented by Assistant U.S. Attorney Gurbir S. Grewal of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the Indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Linda Foster Esq., assistant federal public defender, Newark