New York Business Owner Pleads Guilty to Tax Evasion

A Long Island, New York, business owner pleaded guilty today to tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to documents filed with the court, Warren J. Krotz, 62, of Huntington, New York, owned and operated W. Krotz Enterprises Inc. (WKEI), a professional painting business that provided services throughout Long Island. Krotz admitted to evading both his individual and employment tax liabilities. From around 2010 through 2016, Krotz cashed approximately $6 million in checks at various check-cashing facilities. These checks were gross receipts of WKEI, but Krotz did not report the amounts on WKEI’s corporate income tax returns. He admitted to paying approximately $2 million in wages to employees in cash. As a result, Krotz did not withhold and pay over to the Internal Revenue Service (IRS) approximately $300,000 in employment taxes. 

Additionally, Krotz admitted to receiving approximately $3 million in income that he did not report on his personal tax returns. In total, Krotz admitted to causing a tax loss to the IRS of approximately one million dollars.

The Honorable Joseph F. Bianco scheduled sentencing for Sept. 25, 2019.  Krotz faces a statutory maximum sentence of five years in prison, as well as restitution and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Jessica Moran and Kathryn Sparks of the Tax Division, who are prosecuting this case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.