WASHINGTON, D.C. (3/5/13) – Preet Bharara, the United States Attorney for the Southern District of New York, Toni Weirauch; the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (IRS-CI); and George Venizelos, the Assistant Director in Charge of the New York Field Division of the Federal Bureau of Investigation (FBI), announced that former city of Yonkers Republican Party Chairman Zehy Jereis pled guilty today in White Plains federal court to a one-count information charging him with failing to pay more than $60,000 in payroll taxes to the IRS. Jereis surrendered this morning in the federal courthouse in White Plains and was presented and arraigned before U.S. Magistrate Judge George A. Yanthis. The case was assigned to U.S. District Judge Edgardo Ramos, who presided over the guilty plea hearing this morning.
Manhattan U.S. Attorney Preet Bharara stated, “On the very day he is surrendering to serve a prison term of 48 months in connection with his conviction on public corruption charges, Zehy Jereis is back in court admitting he defrauded the IRS. Mr. Jereis has a lot to answer for, and today he begins doing so.”
IRS Special Agent in Charge Toni Weirauch stated, “The tax law is very clear—employers are responsible for withholding employment taxes from the salaries of their employees. IRS-Criminal Investigation takes payroll tax fraud seriously because it both deprives the United States government of tax revenue and it reduces the future benefits that employees would otherwise be entitled to, including Social Security and Medicare.”
FBI Assistant Director in Charge George Venizelos stated, “Jereis, in two separate cases, has been shown to have used a business plan that included cheating. Businessmen who succeed by committing tax fraud and bribing public officials don’t earn our admiration; they go to prison.”
According to the information and statements made during today’s proceeding:
Jereis was a part owner and operator of a combination car wash, gas station, auto repair shop, and convenience store located in Brooklyn, New York, known as Atlantic Gas and Wash LLC (“Atlantic”). Atlantic employed a substantial number of employees to wash and repair cars and to sell gasoline and other products at the convenience store. As an employer, Jereis was obligated to withhold and pay to the IRS certain payroll taxes and to file accurate quarterly payroll tax forms that reported the wages and other compensation received by employees of Atlantic, and the taxes withheld.
During the tax years 2007 through 2009, Jereis paid numerous employees of Atlantic, including undocumented aliens, a total of at least $403,127 in cash and failed to report such cash payments to the IRS. He did so in order to avoid his legal obligation to withhold taxes and to pay approximately $61,678 in payroll taxes to the IRS.
Information provided by the Federal Bureau of Investigation
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