A Mount Kisco maintenance company owner whose clients included Rockefeller Center cheated the IRS out of millions to fuel a "lavish lifestyle," the IRS and federal prosecutors said Wednesday.
Thomas Nastasi III bought $67,000 worth of cigars and maintained a yacht while underreporting his income and withholding his employees' payroll taxes, U.S. Attorney Preet Bharara wrote in a statement.
Nastasi tried to stay one step ahead of investigators, authorities allege, by creating a series of companies and shell corporations that he used to shift money, payroll accounts and debts.
Bharara's office said Nastasi "closed" his business when back taxes accumulated, then simply changed the name of his company, operating out of the same office, with the same employees. Closing one company and starting another meant the IRS "could not impose liens or seize assets until the new business entity became delinquent in its obligations," according to the indictment.
The company was originally called Nastasi-White Inc. and was a family business founded in 1964. Thomas Nastasi became president in 1995, and by 2003 he had accumulated more than $3 million in unpaid payroll taxes, the indictment said.
According to the indictment, Nastasi shifted payroll and operations to a company called Nastasi Maintenance in 2003. Nastasi Maintenance didn't last long, according to the indictment -- by 2005, Nastasi owed an additional million in payroll taxes and changed the name of his business again, this time calling it Nastasi Maintenance & Construction.
The Mount Kisco man didn't escape the notice of the IRS, and he made promises to pay the taxes he owed, "promises he failed to keep," the IRS said. Nastasi made some payments, the IRS said, but though he appeared to cooperate he allegedly lied to the IRS about his assets, underreported his company's income and began hiding revenue by diverting cash elsewhere.
In one example, authorities accused Nastasi of shifting $280,450 from Nastasi Maintenance's coffers to a bank account registered to a company named Technologies Construction, which he also owned. Doing that was another way of shaking the IRS, the indictment said, "rendering those funds unavailable" for collection on back taxes."
Adding to Nastasi's woes, the IRS has accused the Mount Kisco man of failing to file his personal tax returns from 2001 to 2008, and again in 2010.
Court records also show Nastasi has been involved in an ongoing legal battle, since the late 1990s, with relatives who say they're owed shares of the family business.
Nastasi, 45, was charged with three counts of "willful failure to pay over payroll taxes" and a single count of obstructing the IRS. The federal charges carry a combined penalty of a maximum of 18 years in prison and potentially millions of dollars in fines.
In a series of statements issued Thursday, Bharara and Richard Weber, chief criminal investigator for the IRS, said Nastasi's employees didn't know their boss was withholding their payroll taxes. They aren't accused of any wrongdoing but may face difficulties or potentially lose their jobs if the company sinks.
Business owners "cannot use their companies as personal piggy banks," Weber said. "These crimes cause personal harm to employees of the company and rob the U.S. Treasury of tax dollars."
Efforts to locate Nastasi's attorney were unsuccessful Thursday. Phone messages were left on Nastasi's personal and business lines Thursday evening.