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Friday, April 5, 2019

U.S. Attorney Announces Fraud And Money Laundering Charges Against Accountant

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, J. Russell George, U.S. Treasury Inspector General for Tax Administration, Office of Investigations (“TIGTA”), and Brian M. Hickey, Director, New York State Department of Taxation and Finance, Office of Internal Affairs (“NYSDTF”), announced today the arrest of defendant SALVATORE ARENA, who is charged with defrauding clients who trusted him to prepare and pay their taxes, and with misappropriating at least $600,000 of those clients’ funds for his own use.
U.S. Attorney Geoffrey S. Berman said:  “The ability of our government to maintain functions and provide necessary services relies heavily on tax revenue from ordinary Americans.  Self-reporting of taxes relies on the honesty of both taxpayers and tax professionals alike.  When individuals attempt to pervert the system for their own benefit – as we allege Salvatore Arena has done – law enforcement will be there to bring them to justice.”
TIGTA Treasury Inspector General J. Russell George said:  “TIGTA investigates allegations of wrongdoing by tax preparers that impedes tax administration and victimizes their clients.  Today’s arrest sends a clear message that TIGTA will work with its law enforcement partners to aggressively investigate and prosecute perpetrators that exploit the tax system to victimize others.”
NYSDTF Director Brian M. Hickey said:  “When tax preparers blatantly betray the trust of their clients for personal gain it casts a shadow over an entire industry and can deprive communities of revenue for vital services. We will continue to work with our partners in law enforcement to pursue unscrupulous preparers and hold them accountable for their crimes.”
As alleged in the Complaint unsealed today in Manhattan federal court[1]:
During the relevant time period, defendant SALVATORE ARENA purported to offer tax services, including the preparation and payment of taxes, to clients of an accounting firm in Manhattan.  As alleged in the Complaint, instead of making payments on behalf of those clients, as ARENA represented he would, he diverted client funds for his own use.  As alleged, ARENA executed this fraudulent scheme in two primary ways – first, by diverting pre-payments of taxes to his own tax account and later claiming illegitimate refunds; and second, by misappropriating tax payments clients had wired into a bank account controlled by ARENA.
ARENA defrauded multiple victims of at least $600,000 during the period from January 2014 through March 2019.
ARENA, 46, of Queens, New York, is charged with one count each of mail fraud, money laundering, and wire fraud, each of which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of Special Agents from the U.S. Attorney’s Office for the Southern District of New York, Special Agents from TIGTA, and Criminal Investigators from the NYSDTF. 
The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Jarrod L. Schaeffer is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty. 

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