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FOR IMMEDIATE RELEASE
Thursday, February 6, 2020

New York Plumbing Contractor Pleads Guilty to Employment Tax Fraud

A Queens, New York, business owner pleaded guilty today to failing to pay employment taxes to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. 

According to court documents and statements made in court, Sergei Denko was the owner and operator of Denko Mechanical Inc. and Independent Mechanical Inc., both contracting businesses in Queens that specialized in plumbing. From 2010 through 2014, Denko cashed customer checks and used the cash to pay employees. Denko then filed false employment tax returns that failed to report the cash wages and the employment taxes due. Denko admitted that he caused a tax loss of more than $360,000 to the Internal Revenue Service (IRS).

U.S. District Judge Rachel P. Kovner scheduled sentencing for June 15, 2020. At sentencing, Denko faces a statutory maximum sentence of five years in prison, a period of supervised release, restitution, and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Eric Schmale and Mark Kotila of the Tax Division, who prosecuted this case.

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

Topic(s): 
Financial Fraud
Tax
Component(s): 
Press Release Number: 
20-151
Updated February 6, 2020