Town of Oyster Bay building and planning Commissioner Frederick Ippolito was charged Friday with six counts of income tax evasion after "willfully" failing to report more than $2 million in consulting fees from a Nassau paving company and a family trust, federal prosecutors said.
Ippolito, 76, of Syosset, pleaded not guilty in U.S. District Court in Central Islip and was released on $20,000 bond. He left the courthouse without comment. If convicted, he faces a maximum sentence of 5 years in prison and a fine of up to $250,000 on each count.
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Failure to report
Ippolito allegedly failed to report income from Carlo Lizza & Sons Paving Inc., of Old Bethpage -- a firm that has worked for the town, Nassau County, the state and is on the competitive bid list for New York City's Department of Design and Construction, records show.
He also allegedly failed to report income from the Lizza Family Trust. A woman answering the phone at the Lizza company Friday said, "We don't have a comment" and hung up.
Town Supervisor John Venditto did not return repeated requests for comment, but town spokeswoman Marta Kane said the town had "no comment."
Ippolito appeared in court Friday afternoon. The commissioner, who has had poor health in recent months, walked with a cane.
Magistrate Judge A. Kathleen Tomlinson summarized the charges and asked Ippolito to enter his plea.
"I'm not guilty, your honor," Ippolito said.
The prosecution did not ask for a bond, but Tomlinson said she was "not comfortable releasing him on his own recognizance" and set an unsecured bond. Tomlinson ordered him to surrender his passport, if he can find it, and not to leave the jurisdiction without special permission. He is scheduled to return to court on April 8.
Ippolito was informed of the charges Thursday and surrendered to federal officials at the IRS office in Bethpage early Friday, said his Williston Park-based attorney, Anthony Capetola. "We're going to vigorously defend the charges," Capetola said. He said he had not discussed the charges with his client.
Ippolito listed income from the Lizza sources in his 2014 financial disclosure form to the town, covering the previous year. Town officials redacted the amount of income in those forms that were provided in response to a Freedom of Information Law request.
Carlo Lizza & Sons has contributed $51,650 to various election campaigns and committees since 1999, state campaign finance records show. Most of the contributions were made to Republicans, including Venditto, though the company contributed to candidates from both parties.
Anthony Santino, spokesman for the Nassau County Republican Committee -- of which Ippolito and Capetola are vice chairmen -- declined to comment.
Ippolito has been a controversial figure as commissioner. He is facing a federal lawsuit filed by the owner of shuttered restaurant Café Al Dente in Oyster Bay. He was recently sued for allegedly denying building permits to a woman who said she refused his sexual advances.
John Capobianco, spokesman for the Oyster Bay Democrats, said the federal charges were "the tip of the iceberg. We've been sounding the alarm bells for years about the nepotism and the potential corruption in the town, and finally it has come to light the stuff that we have been talking about."
Capetola said the charges were not related to Ippolito's work with the town.
The charges resulted from an investigation by the criminal division of the Internal Revenue Service, which found that from 2008 to 2013, Ippolito, "together with others," did not report income from the paving company and family trust on tax returns, prosecutors said.
The indictment, announced by U.S. Attorney for the Eastern District of New York Loretta E. Lynch, did not specify who else was involved. It alleged that Ippolito evaded taxes by "willfully failing to report it [income] on his personal tax returns" or on the returns of "entities he controlled."
Those include CAI Associates Ltd., a consulting and snow-removal business, of which Ippolito serves as president, authorities said. The snow removal business, which operates under the name National Snow Removal, has a contract with the Syosset Public Library.
Last year a state appellate court upheld a lower-court ruling that Ippolito was personally liable for back taxes owed by Christiano's restaurant.
Ippolito worked as town building and planning commissioner from 1978 to 1987. He then worked for Lizza & Sons, court records show, before returning to the town in 2009. Town records show he was paid $129,473 in 2013.
The U.S. Justice Department delivered a subpoena to the town last year for Ippolito's financial disclosure form, sources said. The subpoena did not seek any information relating to town planning department business, they said. Federal officials have declined to comment on the subpoena.
Last week, in an unrelated case, a state Department of Transportation spokesman said Ippolito did not violate a state-issued permit by storing boats on unpaved state property. That investigation was prompted by complaints from Massapequa resident Robert Ripp, whom the town prosecuted for storing his boat on unpaved property at his home, a misdemeanor.
-- With Robert Kessler