10-15-04 -- Cohen, Benjamin et al. -- Guilty Pleas -- News Release

Five New York Business Owners Plead Guilty to Tax Evasion Scheme

NEWARK, N.J. - Five New York business owners pleaded guilty today to failing to report over $750,000 in income they received as part of a tax evasion scheme involving the cashing of fraudulent corporate checks, U.S. Attorney Christopher J. Christie announced.

Benjamin Cohen, 47, New York, N.Y., a 50-percent owner of Interior Design Flooring, Inc. (IDF), a Manhattan-based interior design company, pleaded guilty to a one-count Information charging income tax evasion concerning his individual income tax return for calendar year 2001, according to Assistant U.S. Attorney Deborah J. Gannett.

At his plea hearing before U.S. District Judge Dennis M. Cavanaugh, Cohen admitted that between January 2000 and August 2002, he was a 50-percent owner of IDF. He also admitted he was paid an annual salary by IDF during that time period.

Cohen admitted that he entered into an agreement with an individual he identified as Abie Moskowitz, whereby Cohen would write IDF checks payable to vendors for goods he did not actually receive and give the checks to Moskowitz, who would then cash them.

Four of the other defendants pleading guilty today - see below - also identified Abie Moskowitz as central to the connected tax evasion schemes. A fourth referred to the same individual simply as "Abie." Moskowitz has not been charged.

The investigation is continuing and others are expected to be charged.

Cohen admitted that Moskowitz gave him cash back in the amount of face value of the corporate checks, less a small percentage that Moskowitz kept as a fee for his role in the scheme. Furthermore, Cohen admitted that he fraudulently deducted the amount of those IDF checks as a business expenses on Interior Design Flooring, Inc.’s 2001 U.S. Income Tax Return, Form 1120, Schedule A.

Moreover, Cohen admitted he failed to report approximately $155,500 of income he received, as a result of causing the IDF checks to be cashed, on his 2001 U.S. Individual Income Tax Return. As a result, Cohen admitted an additional tax of approximately $57,323 was due to the United States when he filed his 2001 individual income tax return.

In addition to Cohen’s guilty plea, Judge Cavanaugh accepted guilty pleas today from four other business owners to tax evasion charges:

• Paul Giglio, 53, of Old Bridge, N.J., a 50-percent owner of IDF, pleaded guilty to one count of income tax evasion concerning his U.S. Individual Income Tax Return, for calendar year 2001. Giglio admitted that he failed to report $155,500 in additional taxable income IDF received from an individual he identified as "Abie" as a result of the IDF check cashing scheme, which resulted in a tax due in the amount of $59,674.

• Nathan Mann, 37, of Brooklyn, N.Y., a one-third owner of Jaxi’s, Inc., a Brooklyn-based garment manufacturing business, pleaded guilty to one count of income tax evasion concerning his individual income tax return for calendar year 2000. Mann admitted that he failed to report $96,692 in additional taxable income he received as a result of Jaxi’s, Inc.’s checks being cashed by an individual he identified in court as Abie Moskowitz and another individual, and failing to report the income he received, which resulted in a tax due in the amount of $38,529.

• Edouard Mann, 46, Brooklyn, N.Y., a one-third owner of Jaxi’s, Inc., pleaded guilty to one count of income tax evasion concerning his individual income tax return for calendar year 2000. Edouard Mann admitted he failed to report $96,691 in additional taxable income he received from corporate checks which were written to fictitious vendors. He admitted that an individual he identified as Abie Moskowitz, as well as another individual, cashed the corporate checks in exchange for a fee, which resulted in a tax due in the amount of $35,609.

• David Cohen, 67, Ocean Township, N.J, a 50-percent owner of Azar Industries, Inc., a South Plainfield, N.J.-based import business, pleaded guilty to one count of income tax evasion concerning his individual income tax return for calendar year 2001.David Cohen admitted that he caused Azar Industries, Inc.’s checks to be cashed by an individual he identified as Abie Moskowitz and failed to report the $263,384 in additional taxable income he received, which resulted in a tax due and owing of $101,644.

Christie said that the five business owners under reported a total of approximately $767,767 in income on their individual income tax returns in 2000 and 2001. He stated that $292,779 in tax was due and owing to the United States on this unreported income.

Each defendant face a statutory maximum penalty of five years in prison and $100,000 in fines when sentenced by Judge Cavanaugh in January 2005. Judge Cavanaugh scheduled sentencing for Nathan Mann, Giglio and Benjamin Cohen for January 20 and January 21 for David Cohen and Edouard Mann.

In the filing of a felony Information, a defendant waives the right to have his or her case presented to a federal grand jury and, instead, pleads guilty to charges presented by the Government.

Christie credited the Special Agents of the Internal Revenue Service Criminal Investigation section, under the direction of Special Agent in Charge Patricia J. Haynes, and Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Joseph Billy, Jr., with developing the cases against Benjamin Cohen, Paul Giglio, Edouard Mann, Nathan Mann, and David Cohen.

The Government is represented by Assistant U.S. Attorney Gannett of the U.S. Attorney’s Public Protection Division in Newark.

-end-

Defense Attorneys:

Benjamin Cohen - William Cuozzi, Esq. New York, NY

Paul Giglio - David M. Kohane, Esq Hackensack, NJ

Nathan Mann -Jeffery Rabin, Esq. Brooklyn, NY

Edouard Mann - George Farkas, Esq. Brooklyn, NY

David Cohen- Michael Adelman, Esq. Cherry Hill, NJ