New York Plumbing Contractor Sentenced to 20 Months in Prison for Employment Tax Fraud
A New York man was sentenced today to 20 months in prison for failing to collect and pay over to the IRS $732,462 in employment taxes.
Sergei Denko, of Queens, New York, owned and operated Denko Mechanical Inc. and Independent Mechanical Inc., both contracting businesses in Queens that specialized in plumbing. According to court documents and statements made in court, from 2010 through 2014, Denko cashed more than $5 million in checks made out to companies he owned and operated to fund an “off the books” cash payroll. He did not report the cash wages to the IRS, filed false employment tax returns, and did not pay to the IRS the employment taxes arising from the cash payroll. Denko admitted to causing a total tax loss of $732,462 .
In addition to the term of imprisonment, U.S. District Judge Rachel P. Kovner ordered Denko to serve one year of supervised release. The defendant has already paid $366,231 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
The IRS Criminal Investigation investigated the case.
Trial Attorneys Sam Bean and Mark Kotila of the Tax Division prosecuted the case.