Owner Of Gourmet Food Markets Pleads Guilty In White Plains Federal Court To Participating In Massive Tax Fraud Scheme That Concealed Over $50 Million In Income From The IRS
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ADEM ARICI pled guilty today in White Plains federal court to participating in a tax fraud conspiracy in which more than $50 million in gross receipts from the fine foods supermarkets in which he had an ownership interest was hidden from federal and state tax authorities. ARICI also pled guilty to four counts of subscribing to false and fraudulent federal personal income tax returns, nine counts of aiding and assisting in the preparation of false and fraudulent federal corporate, partnership, and payroll tax returns, and one count of witness tampering. ARICI pled guilty before U.S. Magistrate Judge Paul E. Davison. He is the seventh member of the conspiracy to plead guilty, and cases are pending against two additional co-conspirators who remain at large.
Manhattan U.S. Attorney Bharara stated: “Adem Arici and his co-conspirators appeared to be running a legitimate and very successful business, but in reality he was little more than a serial and flagrant tax cheat – failing to pay either personal or business-related taxes on millions of dollars in income. This Office has absolutely no tolerance for those who violate the tax laws and fail to pay their fair share.”
According to the Superseding Indictment and other documents filed in this case:
ARICI had an ownership interest and played an active management role in the following gourmet food markets (the “Markets”) in New York, New Jersey, and Connecticut:
- Zeytuna, located in New York, New York.
- The Amish Market, located in New York, New York.
- Zeytinia Gourmet, located in Croton-on-Hudson, New York.
- Zeytinia Fine Food Store, located in Oakland, New Jersey.
- Zeytinia Fine Food Store, located in Atlantic City, New Jersey.
- Zeytinia Gourmet Market in Wilton, Connecticut.
The Markets’ customers typically paid for their purchases with either cash or credit cards. Credit card payments, and a small portion of the cash receipts, were deposited into bank accounts maintained by each Market. The remaining cash was diverted from the books and records of the Markets and used to pay business expenses, including the Markets’ employee payrolls. The owners of the Markets paid numerous employees, including undocumented foreign workers, in cash. They then took the remaining cash and divided it up amongst themselves.
The owners of the Markets failed to withhold payroll taxes and to pay those taxes to the IRS and caused the preparation and filing with the IRS of forms that falsely and fraudulently understated the true salaries paid to employees. In many cases, the owners failed to report the salaries of employees entirely. The owners also maintained a second set of books and other records which recorded the true income and expenses of the Markets and reflected the cash that was skimmed. The second set of books showed that the owners of the Markets failed to report in excess of $50 million in gross receipts during the years 2004 through 2009.
With respect to the witness tampering count, on November 18, 2011, ADEM ARICI counseled an individual with whom he had unlawfully traveled to Cuba to tell law enforcement agents with the Department of Homeland Security, among other things, that the individual did not travel to Cuba, did not know ARICI, and had not met with ARICI in Cuba, all of which was untrue.
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ARICI, 51, of Easton, Connecticut, is scheduled to be sentenced by Chief United States District Judge Loretta A. Preska on September 17, 2013. He faces a sentence of up to 54 years in prison and also faces restitution and forfeiture orders each in the amount of up to $15 million.
Mr. Bharara praised the outstanding efforts of the Internal Revenue Service, Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. He also thanked U.S. Department of Justice’s Tax Division for its significant assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Jeffrey Alberts, Lee Renzin, and Perry A. Carbone are in charge of the prosecution.
The charges and allegations contained in the Indictment against the remaining defendants, Omer Ipek and Atilla Yayla, and Marc Verzani, are merely accusations, and the defendants are presumed innocent unless and until proven guilty.