Lorraine Pilitz, Merrick auto biz owner, convicted of hiding income from IRS

The Merrick owner of several auto-related businesses was convicted Wednesday of concealing hundreds of thousands of dollars in income from the IRS while diverting some of the money to her family's personal bank accounts, federal prosecutors said.

A jury in Central Islip found Lorraine Pilitz, 64, guilty after a two-week trial of illegally structuring financial transactions, corruptly obstructing the IRS  and filing false tax returns.

“For years the defendant thought she could get away with hiding substantial amounts of cash and income, impeding the Internal Revenue Service, and cheating her employees," said Breon Peace, United States attorney for the Eastern District of New York. "But the jury saw through the lies and has held her responsible for her actions."

Bruce Barket, Pilitz's Garden City-based defense attorney, said: "We are deeply disappointed with the verdict and will seek to appeal it. [Pilitz] has been fighting this and other litigation because of the fact that she's a woman in a man's business and will continue to fight."

Pilitz, also known as “Lorraine Christie” and “Lorraine Storms," operated several automobile-related businesses across the region, including in Malverne and Rockville Centre, prosecutors said.

Between 2011 and 2013, Pilitz routinely structured cash bank deposits at just under $10,000 to avoid filing required Currency Transaction Reports with the IRS — mandatory for each transaction in excess of $10,000, authorities said. In total, Pilitz concealed hundreds of thousands of dollars from the IRS, prosecutors said.

As part of the same scheme, officials said, Pilitz diverted hundreds of thousands of dollars in business checks into personal and family bank accounts; maintained “off-the-books” payrolls, failed to file personal and corporate tax returns and filed false tax returns that severely underreported her income.

"Lorraine Pilitz set up a complicated scheme to hide hundreds of thousands of dollars from the IRS by grossly underreporting her income and having an ‘off-the-books’ payroll," said Thomas Fattorusso, acting special agent-in-charge of the IRS Criminal Investigation division in New York.