Bethel Construction Company is Sentenced
| U.S. Attorney’s Office May 12, 2010 |
David B. Fein, United States Attorney for the District of Connecticut, announced that WORTH CONSTRUCTION COMPANY, INC., which pleaded guilty to a federal tax charge in January, was sentenced today by United States District Judge Christopher F. Droney in Hartford. Judge Droney ordered the company to serve a two-year term of probation, and to pay a fine in the amount of $150,000.
According to court documents and statements made in court, WORTH CONSTRUCTION, based in Bethel, willfully aided and assisted in the preparation and presentation to the Internal Revenue Service of a false federal income tax return for the 1999 tax year. The return stated that WORTH CONSTRUCTION was entitled to claim business deductions in the amount of $97,220 when, in fact, the company knew it was not entitled to claim those deductions because they were personal expenses of Joseph M. Pontoriero, WORTH CONSTRUCTION’s president and 93 percent shareholder at the time, rather than expenses related to the operation of the business. WORTH CONSTRUCTION did not have any additional federal income tax liability for 1999 because it is a Sub-Chapter S Corporation where income or loss flows through to its shareholders.
Between 1997 and 2001, WORTH CONSTRUCTION’s improper deductions exceeded $350,000.
As part of the resolution of this case, WORTH CONSTRUCTION has agreed, and Judge Droney today ordered, that the company will continue to hire an independent monitor, which has been in place since October 2008, to oversee its operations, including its receipt and treatment of funds. The Court also ordered that WORTH CONSTRUCTION implement and enforce an effective program to prevent and detect future violations of law and that the company not allow Pontoriero to be involved in the operation of its business, with the limited exception of signing bonds.
On January 8, 2010, WORTH CONSTRUCTION pleaded guilty to one count of aiding and abetting in the filing of a false federal income tax return.
On December 18, 2009, Pontoriero pleaded guilty to one count of giving a gratuity to a public official, and one count of willfully failing to provide information to the IRS. On April 22, 2010, Pontoriero was sentenced to two years of probation, the first six months of which he must serve in home confinement. Pontoriero also has paid $31,057 in back taxes, plus penalties and interest stemming from income from the sale of vehicles that he failed to report.
Pontoriero has paid an additional $138,521 in back taxes, plus penalties and interest, on income that passed through WORTH CONSTRUCTION.
This investigation was conducted by the Federal Bureau of Investigation; the U.S. Department of Labor, Office of Inspector General; and the Internal Revenue Service – Criminal Investigation. The case was prosecuted by Assistant United States Attorney Peter S. Jongbloed.