U.S. Attorney's Office
District of Rhode Island
(401) 709-5000
June 2, 2014

North Smithfield Businessman Pleads Guilty to Conspiracy, Tax Evasion

PROVIDENCE, RI—Paul F. Pytko, 49, owner of Pytko Construction Corp. in North Smithfield, Rhode Island, pleaded guilty today in federal court to participating in a conspiracy to conceal the sale of company assets he agreed to sell in order to satisfy more than $1 million owed to the IRS, announced United States Attorney Peter F. Neronha, William P. Offord, Special Agent in Charge of IRS-Criminal Investigation, and Vincent B. Lisi, Special Agent in Charge of the Boston Field Office of the FBI.

Pytko pleaded guilty in U.S. District Court to one count of conspiracy to defraud the United States by evading payments of taxes and one count of tax evasion.

According to information presented to the court, Pytko had agreed to sell several large pieces of construction equipment and that the assets would be used to pay down some of the $1,035,547.91 in debt owed to the IRS in unremitted employee withholding taxes, penalties, and interest incurred for tax periods ending in September 2003 through June 2006. Pytko admitted to the court that the equipment was sold but that the proceeds collected were wired into third party accounts and then disbursements paid to him to pay for business expenses and for his own personal use.

According to information presented to the court, on various dates between June 7, 2007 and July 10, 2008, Pytko sold a backhoe, front end loader, screening machine, bulldozer, roller, two excavators, and a rock crusher for a total of $611,420. None of the assets were paid to the IRS.

Pytko is scheduled to be sentenced by U.S. District Court Chief Judge William E. Smith on September 19, 2014.

Conspiracy to evade taxes is punishable by a statutory penalty up to five years in federal prison and a fine of up to $250,000. Tax evasion is punishable by a statutory penalty of five years in federal prison and a fine of up to $100,000.

The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose, with the assistance of Assistant U.S. Attorney John P. McAdams.

The matter was investigated by IRS-Criminal Investigation and FBI.

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