FOR IMMEDIATE RELEASE                                                   TAX
THURSDAY, OCTOBER 27, 1994                                   (202) 616-2765
                                                         TDD (202) 514-1888


     Washington, D.C. -- The Department of Justice announced
today that four more defendants in the largest gasoline excise
tax prosecution to date have pleaded guilty.  Joseph A. Macchia,
of Lattingtown, N.Y., and two of his sons, Lawrence Macchia and
George Macchia, admitted conspiring to evade approximately $85
million in federal gasoline excise taxes.  They each also pleaded
guilty to two counts of excise tax evasion.  A third son, Joseph
L. Macchia, pleaded guilty to conspiracy, the only charge against
him.  The four entered their guilty pleas in United States
District Court at Hauppauge, New York in front of the Honorable
Leonard D. Wexler.  Each faces a maximum of five years in prison
and a $250,000 fine for each count to which he pleaded guilty.
     The Macchias owned and operated a series of wholesale
gasoline companies, including a trucking company and many holding
and management companies, which owned and managed a large number
of gasoline stations, most of which carried the "Citgo" brand. 
Their central company was New York Fuel terminal Corporation, 
which operated a gasoline storage facility in Brooklyn known as 
the "M & Q" Terminal.  "M & Q" was short for Manhattan & Queens -
the Macchias also operated Manhattan & Queens Fuel and M & Q
Trucking Corp.  
     New York Fuel was registered with the IRS and was required
to pay a tax on each gallon of gasoline it sold to an
unregistered company.  The Macchias, through New York Fuel, sold
almost one billion gallons of gasoline to unregistered companies
without paying the tax they owed.  Many of the unregistered
companies were controlled by the co-defendant Marat Balagula, who
pleaded guilty to all of the charges against him on October 13,
     Most of these illicit sales were purportedly made by "book
transfers" within the M & Q terminal.  Book transfers occur when
the title to gasoline within the storage tank passes from one
company to another, but the product itself does not move.  The
conspirators created fictitious book transfer records indicate 
that the gasoline sold by New York Fuel passed through the
accounts of sever other licensed and unlicensed companies before
being received by the actual purchaser, when in fact, the only
transfer was from New York Fuel to the actual unlicensed
     Assistant Attorney General Loretta C. Argrett hailed the
pleas, saying that "the successful prosecution of this complex
case proves our determination to combat excise tax evasion."
     The case was prosecuted by attorneys of the Tax Division of
the Department of Justice and was investigated by the Criminal
Investigation and Examination Divisions of the Internal Revenue
Service and the New York State Tax Department.