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Post date: September 18 2015

A.G. Schneiderman And Tax Commissioner Boone Announce Felony Conviction Of Ithaca Businessman In Tax Fraud Case

Jonathan Pargh Pleads Guilty To Grand Larceny For Failing To Pay

Sales And Personal Income Taxes Owed To New York State

Defendant Paid More Than $280,000 In Overdue Taxes, Penalties And Interest

ITHACA – Attorney General Eric T. Schneiderman and New York State Commissioner of Taxation and Finance Jerry Boone today announced the felony conviction of Jonathan Pargh, 59, an Ithaca businessman for underreporting his New York sales and personal income taxes between 2005 and 2012.

“When businesses and individuals dodge paying taxes it unfairly shifts the burden to honest, law-abiding taxpayers,” said Attorney General Schneiderman. “Today’s conviction makes it clear that when unscrupulous business owners break the law, they will be held accountable.”

“Local municipalities, as well as the State, count on sales tax dollars to fund a wide variety of necessary public services,” said Commissioner Boone. “That’s why sales tax fraud is a serious crime, one we will continue to battle with the help of the Attorney General’s office.”

Pargh entered a guilty plea before the Honorable John C. Rowley in Tompkins County Court to one count of Grand Larceny in the Third Degree, a Class “D” felony.  

Pargh was the owner of two retail establishments in Ithaca, a head shop named 3-D Light and a women’s clothing and accessory store named Loose Threads.  Both businesses, which were operated by Pargh as sole proprietorships, collected sales tax on all of their retail sales. 

An investigation initiated by the New York State Department of Taxation and Finance revealed that between June 1, 2005 and August 31, 2012, Pargh underreported the taxable sales for 3-D Light and Loose Threads by $1,152,856.47.  Pargh also underreported his business income on his New York State personal income tax returns for both retail stores by $632,383.20. As a result, between June 1, 2005 and August 31, 2012, Pargh failed to remit to New York State sales tax in the amount of $86,420.11 and personal income tax in the amount of $48,764.00.

Prior to today’s guilty plea, Pargh repaid $86,420.11 in sales tax and $48,764.00 in personal income tax, as well as approximately $154,561.86 in penalties and interest, to the New York State Department of Taxation and Finance. Pargh is scheduled to be sentenced to 5 years probation on November 18th.

The Attorney General’s Office thanks the New York State Department of Taxation and Finance for their invaluable assistance on this case.

The case was investigated by the Department’s Criminal Investigations Division, and by Attorney General Investigator Joel Cordone, under the supervision of Deputy Chief Investigator Tony Karam.  The Investigations Bureau is led by Chief Dominick Zarrella.

The case is being prosecuted by Assistant Attorney General Andrew Tarkowski of the Criminal Enforcement and Financial Crimes Bureau.  The Bureau is led by Bureau Chief Gary Fishman and Deputy Chiefs Stephanie Swenton and Meryl Lutsky.  The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.