Attorney General Cuomo Announces Conviction Of Genesee County Business Owner For Tax Fraud
BUFFALO, N.Y. (September 15, 2008) - Attorney General Andrew M. Cuomo today announced the conviction of a Genesee County company and business owner for failing to file necessary tax returns and reports for three consecutive years.
Cregg S. Paul, 54, of Batavia and his payroll-leasing company, ELN Professional Employers Group, Inc., were found guilty by Genesee County Court Judge Robert C. Noonan for failure to file a return or report, corporate returns, in violation of the New York State Tax Law (class E felony). Paul faces up to four years in prison and a $50,000 fine when he is sentenced in December. ELN Professional Employers Group, Inc. faces a $250,000 fine.
“Business owners who avoid their tax obligations unfairly put the burden on law-abiding New Yorkers,” said Attorney General Cuomo. “New York state businesses must play by the rules so as not to unfairly rip off taxpayers. My office will continue to aggressively pursue companies that try to duck their legal responsibilities.”
New York State Department of Taxation and Finance Commissioner Robert L. Megna said, “All New Yorkers have an obligation to ensure that their taxes are filed properly and on time. We worked with Attorney General Cuomo’s office to hold this business owner - who neglected to file the legally required paperwork - accountable for his actions. We will continue to work with our partners in government to ensure that all businesses in New York state operate on a level playing field.”
ELN leased employees and provided payroll services to other companies in the Rochester, Batavia, and Hornell areas, including the payment of the leased employees’ salaries or wages, the appropriate taxes and the costs of Workers’ Compensation and Unemployment Insurance coverage. For the 1999, 2000, and 2001 tax years, ELN and Paul failed to file a corporate return or report as required by law. At the end of 2004, ELN filed for bankruptcy protection.
Attorney General Cuomo’s Rochester Regional Office has also filed a civil lawsuit against Paul, ELN and other employee leasing companies that Paul managed. The suit alleges that the leasing companies received payments from its clients, including the leased employees’ wages, the appropriate taxes, the cost of Workers’ Compensation and Unemployment Insurance coverage and a fee that ELN charged to provide these services, but then failed to remit the money to the appropriate governmental agency or failed to use the money for its intended purposes.
The criminal case was prosecuted by Assistant Attorney General Cydney A. Kelly of the Criminal Prosecutions Bureau under the supervision of Deputy Bureau Chief Richard Ernst. The investigation was conducted by OAG Investigators Sandra Migaj, Linda Grody, Paul Scherf and former OAG Investigator Michael Hagler under the supervision of Senior Investigator Michael McCartney and Assistant Chief Investigator James Domres. The investigation was completed with the assistance of New York State Department of Taxation and Finance Auditor David Gehring.
The case is one of several being announced today as part of the opening of the Attorney General’s new Western New York Regional Office at Main Place Tower, 350 Main Street in Buffalo. The Western New York Regional Office is the largest of the Attorney General’s 13 regional offices, and serves the counties of Erie, Niagara, Chautauqua, Genesee, Wyoming, Alleghany, Cattaraugus, and Orleans. Home to approximately 100 employees, last year it opened more than 5,000 cases covering a myriad of legal matters from consumer protection to the defense of the state. The office serves as a ‘front door’ to the Office of the Attorney General for the people of Western New York.