Two former senior managers of Major World, the Long Island City-based car dealer, each were sentenced to 3 years' probation Friday for filing a false corporate tax return.
Harold Bendell, 71, and his brother, Bruce Bendell, 65, had admitted last July to filing the false return for 2009 that underreported income and inflated expenses, according to officials.
Before they were sentenced, the brothers, who were the driving force behind the business growing to become one of the largest car dealers in the metropolitan area, paid $3.8 million in restitution and interest to the IRS, officials said.
They each could have faced up to 3 years in prison, and U.S. District Judge Joanna Seybert said she had planned to give each brother 6 months in prison. But Seybert said she was moved by their otherwise exemplary lives, including extensive charitable work, solid family life, and cooperation with government investigators.
That cooperation included almost a dozen debriefing sessions, and paying close to $1 million for a forensic accounting firm that untangled the complicated tax-avoidance scheme, Eastern District Assistant U.S. Attorney Burton Ryan said in court.
The Bendell brothers also put their interest in the company in a blind trust, defense attorneys said.
Bruce Bendell told Seybert: “I stand before you with great remorse and fully accept responsibility.”
Harold Bendell, before he was sentenced, declined to comment on his case.
Bruce Bendell’s defense attorney, Scott Resnik of Manhattan, and Harold Bendell’s defense attorney, Steven Harfenist of Lake Success, argued before the sentencing that while their clients had committed a crime, it was a singular act in their lives.
When the brothers pleaded guilty last July, James Robnett, head of the Internal Revenue Service’s Criminal Investigation Unit in New York, said: “This great country of ours relies on a tax system based on voluntary compliance. … By their pleas, Harold and Bruce Bendell admitted that they concealed millions of dollars of their company’s income and avoided paying their fair share of taxes to the United States government.”
John Marzulli, a spokesman for Eastern District prosecutors, declined to comment Friday.
In January, Major World was fined $3 million by a city administrative law judge for selling unsafe cars and concealing the actual cost of vehicles to customers.
Resnik and Harfenist said the brothers have had nothing to do with the operation of the company for many years.
Harfenist, who also represents Major World in the city case, said that it will appeal, and denied that the business had done anything illegal.