Former Minnesota Real Estate Developer Sentenced To 78 Months In Prison And $1.5 Million Special Assessment For Tax Evasion, Mail And Wire Fraud
United States Attorney Andrew M. Luger today announced the sentencing of BARTOLOMEA JOSEPH MONTANARI, 57, formerly of Bayport, Minn., to 78 months of imprisonment for tax evasion and fraud.
On May 21, 2014, MONTANARI was indicted with one count of Evasion of Payment of Taxes, one count of Mail Fraud, and one count of Wire Fraud. On November 25, 2014, following a 6-day trial, a federal jury found MONTANARI guilty on all counts. On September 9, 2015, U.S. District Judge Ann D. Montgomery sentenced MONTANARI to 78 months, or 6 ½ years, of imprisonment. Judge Montgomery further ordered MONTANARI to pay mandatory restitution of $100,000 and, additionally, to pay more than $1.5 million as a special assessment for the taxes, interest, and penalties owed.
The evidence presented at trial proved that from 2009 until January 2012, MONTANARI willfully evaded the payment of employment and excise taxes owed by him and the three businesses he controlled: St. Croix Development, Emlyn Coal Processing, and Montie’s Resources. One of the ways MONTANARI avoided paying taxes was by transferring over $1.1 million into a bank account in the name of Bella Luca Properties LLC (“Bella Luca”), a shell company with no legitimate business purpose but used by MONTANARI to pay personal expenses. MONTANARI evaded payment of more than $700,000 in taxes and to the federal government.
In December 2009, when the IRS attempted to collect taxes and TFRPs, MONTANARI filed a fraudulent financial statement making numerous misrepresentations to the IRS to avoid paying the taxes he owed. For example, he failed to disclose multiple personal vehicles that he owned and he denied the existence of the Bella Luca bank account, which he was using to receive monthly compensation of $50,000 from two of his companies. MONTANARI also falsely claimed to be living in Bayport, Minnesota, when, in truth, he had already moved into a $1.4 million house he was purchasing in Knoxville, Tennessee.
In addition, as part of a fraud scheme, MONTANARI lied about the sale price of a Caterpillar bulldozer that he needed to purchase for one of his companies. MONTANARI submitted a falsified invoice to the dozer financing company, which issued a check for the dozer for $100,000 more than the true purchase price. MONTANARI kept the extra $100,000 and used it as a down payment for his house in Tennessee.
“Business owners have a responsibility to pay excise taxes, and turn over their employees’ employment taxes withheld from their paychecks, to the Internal Revenue Service,” said Special Agent in Charge Shea Jones of the IRS Criminal Investigation. “This sentence should send a clear message; schemes to evade the payment of taxes are a violation of the Federal Tax Laws and the consequences of such schemes can and will result in significant jail time.”
“Montanari not only evaded payment of taxes and defrauded his business partner, but he repeatedly lied to IRS investigators, pleading poor while living an extravagant lifestyle,” said Assistant United States Attorney Melinda A. Williams. “Today’s sentence sends a strong message to those who would try to cheat the government that this behavior will not be tolerated.”
In sentencing MONTANARI, Judge Montgomery noted that the defendant used the money he stole to finance an “incredibly flamboyant lifestyle,” that this was “not a single error of judgment,” and that MONTANARI had “many chances” to correct his behavior, but did not. Therefore, Judge Montgomery said she focused her sentence on “what will get the message across.”
This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division, the U.S. Postal Inspection Service, and the Minnesota Financial Crimes Task Force.
Assistant U.S. Attorney Melinda A. Williams prosecuted this case.
BARTOLOMEA JOSEPH MONTANARI, 57
- Evasion of Payment of Taxes, 1 count
- Mail Fraud, 1 count
- Wire Fraud, 1 count
- 78 months in federal prison
- $1.5 million special assessment
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United States Attorney’s Office, District of Minnesota: (612) 664-5600