Owner Of Castro Valley Pizzeria Sentenced For Failing To Pay Employment Taxes
OAKLAND, Calif. – Frank Eugene Gemignani III was sentenced today to 12 months in prison and ordered to pay $255,452 in restitution for failing to pay over employment taxes, announced Acting U.S. Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
According to the plea agreement, Gemignani, 47, of Concord, operated Pyzano’s Pizzeria in Castro Valley from 1991 through 2012. As the sole proprietor, Gemignani exercised control over Pyzano’s business affairs, including signing and filing Pyzano’s tax returns and paying to the IRS payroll taxes withheld from Pyzano’s employees’ paychecks. From April 1, 2008, through December 31, 2010, Gemignani deducted and collected approximately $184,267 in federal income taxes and Federal Insurance Contributions Act taxes (FICA) from Pyzano’s employees’ wages, but he failed to pass these taxes on to the IRS. Additionally, Gemignani failed to pay at least $63,333 of FICA and Federal Unemployment Tax Act (FUTA) taxes that the business, Pyzano’s, itself owed for 2009 and 2010. Gemignani also claimed a credit for amounts withheld from his Pyzano’s paychecks on his U.S. Individual Income Tax Return, Form 1040, for 2007, even though he knew he had never paid those withholdings over to the IRS. Gemignani was charged by indictment on June 19, 2014, with 11 counts of failure to pay over employment taxes, in violation of Title 26, U.S.C § 7202, and one count of filing a false tax return, in violation of 26 U.S.C. § 7206(1). He pleaded guilty to one count failure to pay over employment taxes.
The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge, in Oakland. In addition to the prison term, Judge White also sentenced Gemignani to a one year period of supervised release. Gemignani has been ordered to begin serving his sentence no later than June 6, 2016.
Assistant US Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.