ALAN VINEGRAD, United States Attorney for the Eastern District of New York, PAUL L. MACHALEK, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office, and RAYMOND CASEY, Chairman and Executive Director of the New York City Trade Waste Commission, announced that CHARLES MANZO and DONALD MANZO, brothers and co-owners of B. Manzo & Son, M. Manzo & Company, Inc. ("B. Manzo & Son"), each pled guilty today to conspiring to defraud the United States by obstructing the Internal Revenue Service in the ascertainment, computation and collection of income tax, in violation of Title 18, United States Code, Section 371. The guilty pleas were entered before the Honorable Joan M. Azrack, United States Magistrate Judge, at the United States Courthouse in Brooklyn.

B. Manzo & Son, the largest private carter on Staten Island, is a waste removal and disposal business with offices at 900 Hylan Boulevard, a waste transfer station at 260 Meredith Avenue and a garage at 12 Prospect Street, each located on Staten Island. According to the charge to which the defendants pled guilty, B. Manzo & Son, among other services, provided commercial and residential customers with large containers, known as roll-off containers, for the collection of construction and other debris. These customers paid B. Manzo & Son a flat fee, in cash or by check, for the use of the containers.

The government alleged that from 1995 to 1999, the defendants recorded a portion of their income from their roll-off container business on bank deposit slips and other documents, and deposited that income into B. Manzo & Son bank accounts. The defendants also maintained separate notebooks in which they recorded the balance of their income from their roll-off container business. The latter income was not deposited into bank accounts, and it was not disclosed to the accountants engaged by the defendants to prepare and file the federal income tax returns for B. Manzo & Son.

The government charged that between 1995 and 1999, the defendants earned more than $2 million in income from their roll-off container business, which they hid from their accountants and failed to report to the Internal Revenue Service on B. Manzo & Son's income tax returns.

As part of their plea agreements with the government, prior to sentencing the defendants will each file an affidavit with the New York City Trade Waste Commission agreeing not to participate in any way in the affairs of any firm or business involved in waste collection and carting, removal or disposal in New York City. The New York City Trade Waste Commission was established in 1996 by former Mayor Rudolph Giuliani and the New York City Council to regulate and oversee private carters in New York City and assure that those carters operate in compliance with all applicable federal and state laws. The Commission is comprised of, among others, officers of the New York City Sanitation Police and detectives from the New York City Police Department's Organized Crime Investigations Division.

In announcing the guilty pleas, MR. VINEGRAD stated, "Today's guilty pleas and the defendants' agreements to be barred from the city's trade waste industry demonstrate the serious consequences awaiting those who evade their tax reporting obligations."

MR. MACHALEK stated, "This prosecution is a result of successful team work and cooperation by the Internal Revenue Service-Criminal Investigation and the New York City Trade Waste Commission. This investigation uncovered another kind of abuse by unscrupulous carters --the failure to report and pay taxes on business receipts. I thank the Trade Waste Commission for the opportunity to work with them in the pursuit of our investigative mission and for the opportunity to assist the Trade Waste Commission in cleaning up the industry."

CHAIRMAN CASEY stated, "I wish to commend the members of the Trade Waste Commission, the Internal Revenue Service-Criminal Investigation, New York Field Office, the New York City Sanitation Police, the New York City Police Department's Organized Crime Investigations Division, and the United States Attorney's Office for the Eastern District of New York, who brought this investigation and prosecution to this highly successful conclusion. I am also pleased to announce that these guilty pleas today mark the Commission's first criminal investigation brought to prosecution in the new administration of Mayor Bloomberg and illustrate the ongoing commitment to maintaining the carting industry as an m honest industry.

"This investigation also underscores a commitment that I had made to the trade waste industry when I was appointed Chairman: To level the 'playing field' in the market place in which each of the carting companies regulated by the TWC operates, and to ensure that the playing field remains level in order to provide each of them with a fair opportunity to succeed in this market. When the principals of carting companies cheat on their taxes, they gain an unfair advantage over their competition who pay their fair shares of taxes and comply with the law. This investigation, ensuing prosecution and lifetime debarments of the principals now have restored the balance to the playing field that these defendants had sought to tip in their favor."

If the guilty pleas are accepted, the defendants will be sentenced by the Honorable Frederic Block, United States District Judge. A sentencing date has not yet been scheduled. Each defendant faces a maximum sentence of five years incarceration, and a $250,000 fine or twice the tax loss resulting from the charged tax fraud. In addition, as part of their guilty pleas, the defendants each agreed to pay all back taxes, with interest and penalties.

The government's case is being prosecuted by Assistant United States Attorney Andrew J. Frisch.