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Businessman gets 6-month sentence in tax evasion

BY ROBERT E. KESSLER | robert.kessler@newsday.com

2:33 PM EDT, April 25, 2008

The head of a business that supplies skilled, but undocumented carpenters to many home-construction projects on Long Island was sentenced Friday to 6 months at a federal halfway house for income tax evasion.

Jay Kuhn, the head of Kuhn Brothers Construction, in St. James, had faced up to 3 years in prison after he was charged with evading $400,000 in federal taxes by paying his workers off-the-books.

But U.S. District Judge Thomas Platt at the federal court in Central Islip gave a lower sentence than called for by sentencing guidelines, after both Kuhn's attorney, James O'Rourke, of Hauppauge, and Assistant U.S. Attorney Charles Kelly, argued Kuhn was actively cooperating with the investigation into tax evasion in the building industry.

Under the terms of the sentence, Kuhn will have to repay the $400,000 in evaded taxes, serve three years' supervised release, and serve 6 months in a federal halfway house from which he will be allowed to go out to work during the day.

The arrest of Kuhn in July by agents of the Criminal Investigation Division of the Internal Revenue Service was the first public revelation of an ongoing federal probe into the payment of off-the-books wages to undocumented immigrants in the home-building industry. Three executives of other carpentry businesses are awaiting sentencing as a result of the investigation.

Before he was sentenced, Kuhn said in court Friday, "I'm very sorry."

O'Rourke, Kuhn's attorney, said his client has spent $70,000 over the years for immigration lawyers in a so far unsuccessful attempt to get many of his carpenters green cards.

Officials of the carpenters union say many of the carpenters on Long Island who construct the wood skeletons, or frames, of houses, are undocumented immigrants -- often Ecuadorans who reside in the Patchogue area, or Brazilians from Newark.

"The solution has to be in Washington," O'Rourke said, referring to his belief in the need to change immigration policy. "It's difficult to find so-called manual laborers in our country willing to work on-the-books."

Michael Conroy, the head organizer for the Empire State Regional Council of Carpenters, who was in court, said because of the off-the-books situation, he believed taxpayers and the government around the country are cheated out of billions of dollars in revenue.