Philip R. Kossoy, 49, of Freehold, who owns Absolutely Spotless Home Cleaning Professionals, Inc., a mold remediation business, was sentenced to 364 days in the county jail and two years of probation by Superior Court Judge Anthony J. Mellaci Jr. in Monmouth County. Kossoy pleaded guilty on Nov. 13 to third-degree charges of theft by failure to make required disposition of property received and failure to pay taxes. Kossoy previously paid the state $1.1 million, including $900,000 in unpaid taxes, penalties and interest, plus a $200,000 anti-money laundering penalty. He forfeited $424,000 from bank accounts seized by the state, and paid the remaining $676,000 at the plea hearing.
Deputy Attorney General Peter Gallagher prosecuted the case and handled the sentencing for the Division of Criminal Justice Financial & Computer Crimes Bureau. The case was investigated by the Division of Taxation Office of Criminal Investigation and the Division of Criminal Justice.
In pleading guilty, Kossoy admitted that from January 2008 through July 2011, he engaged in a scheme to disguise and conceal income in order to defraud the State of New Jersey out of hundreds of thousands of dollars by underpaying New Jersey Gross Income Tax, State Sales Tax and New Jersey Corporate Business Tax. This included sales taxes he collected but failed to remit to the state.
“Tax fraud of this nature is nothing short of stealing from the state and its honest taxpayers, who then are forced to pay higher taxes to cover the deficit,” said Acting Attorney General Hoffman. “Through cases such as this one, we are sending a loud and clear message that business owners who cheat the state and fail to remit taxes will be prosecuted as criminals.”
“Would-be tax cheats have a simple choice: pay now or pay later, when you may face time behind bars as well as civil penalties,” said Director Elie Honig of the Division of Criminal Justice. “We are working closely with the Division of Taxation to detect and prosecute tax evaders.”
“The penalties imposed in this case match the seriousness of the fraud that was attempted,” said State Treasurer Andrew Sidamon-Eristoff.
Kossoy sought to conceal and disguise revenue from his business by taking cash payments from customers and depositing them into multiple personal bank accounts opened by him, rather than his business account. Kossoy also sought to disguise the source of these funds by having customers make checks payable to him personally and not to the business. In addition, the state’s investigation revealed 192 instances of Kossoy altering customer checks by blacking out the memo section of the checks, which referenced the true business purpose of the check. To further conceal income, Kossoy deposited more than $1 million in cash and checks into personal accounts created using another person’s Social Security number.
The case was investigated for the Division of Taxation Office of Criminal Investigation by Criminal Forensic Auditors Kerry Czymek and Kevin Curry and Supervising Forensic Auditor Debra Lewaine. Detective Anne Hayes, Deputy Attorney General Gallagher and Deputy Attorney General John Nicodemo handled the investigation for the Division of Criminal Justice Financial & Computer Crimes Bureau. Deputy Attorney General Derek Miller handled the state’s criminal forfeiture action. The Division of Consumer Affairs provided valuable assistance.
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