Jonathan Pargh Allegedly Failed To Pay Over $130,000 In Taxes Owed To New York State
Schneiderman: We Will Fight to Root Out Tax Fraud And Hold Dishonest Business Owners Accountable
ITHACA – Attorney General Eric T. Schneiderman and New York State Commissioner of Taxation and Finance Jerry Boone today announced the arrest of Jonathan Pargh, 59, an Ithaca businessman, on two felony charges stemming from underreporting taxable sales and sales tax due between 2005 and 2012.
“Business owners in New York State must pay their fair share of taxes, not skirt the law to boost their bottom line,” said Attorney General Schneiderman. “My office will continue working with Commissioner Boone to root out tax fraud and hold unscrupulous business owners accountable.”
“When a business collects sales tax from a customer, then fails to remit the tax to the State as required by law, it has committed a serious crime,” Commissioner Boone said. “We will continue to work aggressively with Attorney General Schneiderman and law enforcement agencies throughout the state to prosecute such crimes.”
According to the felony complaint filed today in Ithaca City Court, Pargh was the owner of two retail establishments in Ithaca: a “head shop” called “3-D Light” and a women’s clothing and accessory store called “Loose Threads.” Pargh operated both businesses as sole proprietorships, and both stores collected sales tax on all retail sales.
An investigation by the New York State Department of Taxation and Finance revealed that between June 1, 2005 and August 31, 2012, Pargh underreported taxable sales for both 3-D Light and Loose Threads in the amount of $1,152,856.47. Pargh also underreported gross business income on his New York State personal income tax returns for both retail stores, which were subject to income tax under the Tax Law, in the amount of $632,383.20. As a result, between June 1, 2005 and August 31, 2012, Pargh failed to remit sales tax due to the State of New York in the amount of $86,420.11 and failed to remit personal income tax due to the State of New York in the amount of $48,764.00.
Pargh was arraigned this morning before the Honorable Richard M. Wallace in Ithaca City Court, on one count of Grand Larceny in the Third Degree (a Class “D” felony) and one count of Criminal Tax Fraud in the Fourth Degree (a Class “E” felony). The case has been transferred to Tompkins County Court for further proceedings.
The Attorney General’s Office thanks the New York State Department of Taxation and Finance for their invaluable assistance on this case.
The charges against the defendant are merely accusations and the defendant is presumed innocent until and unless proven guilty.
The case was investigated by Department of Taxation and Finance Assistant Chief Investigator David Pohle, with analytical support from Auditor Lee Shepter, and by Attorney General Investigator Joel Cordone, under the supervision of Deputy Chief Investigator Antoine 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.
