Monroe Man Admits Role in Rental Income Fraud Scheme
The United States Attorney for the District of Connecticut announced that ANTHONY TESTO, 66, of Monroe, pleaded guilty today before U.S. Magistrate Judge Donna F. Martinez in Hartford to one count of conspiracy to commit wire fraud stemming from a scheme to defraud a Bridgeport-based residential property owner. TESTO is the owner and president of ACT Builders, Inc., also entered a plea of guilty to the same charge on behalf of his company.
According to court documents and statements made in court, ACT Builders, Inc. was contracted to serve as a property manager for an entity in Bridgeport that owned an apartment complex and several single and multi-family residences. TESTO’s role as property manager included filling vacant rental units, setting rental amounts, collecting security deposits, collecting rent from tenants and depositing rental payments in the property owner’s bank account. TESTO also was required to submit to the property owner a monthly “rent roll,” which was a spreadsheet showing the occupancy of the rental units, the rental amounts due and the rental payments collected from tenants.
From approximately January 2007 to August 2010, TESTO, ACT Builders and others schemed to defraud the property owner by submitting fraudulent rent rolls that misrepresented that certain rental units were vacant with no rent due when, in fact, the apartments were occupied and rent had been collected. The rent rolls also misrepresented that the rent due and collected for certain rental units was lower than the amount that was actually collected. TESTO deposited rental income that was due to the property owner into both his personal bank account and the ACT Builders bank account.
TESTO, who hired subcontractors to provide maintenance services for the property, also submitted fraudulent subcontractor invoices to the property owner.
TESTO defrauded the property owner of at least $275,000 through this scheme. He also failed to report this fraudulent income on his 2007 through 2010 personal federal income tax returns, resulting in a tax loss to the Internal Revenue Service of $71,795.
TESTO and Act Builders are scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on September 2, 2014. TESTO faces a maximum term of imprisonment of 20 years, and ACT Builders faces a maximum term of probation of five years.
TESTO has agreed to pay full restitution to the victim property owner, as well as back taxes, plus penalties and interest.
TESTO was arrested on March 13, 2014 and is currently released on a $500,000 bond.
This matter is being investigated by the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Felice Duffy.