AG wraps up sales tax investigation of Cortland restaurant owners

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New York Attorney General Letitia James and New York State Department of Taxation and Finance Acting Commissioner Amanda Hiller today announced the guilty pleas of the owners of a number of popular upstate restaurants and bars for tax evasion.

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George Seibel, 60, of Homer, and Anthony Caruso, 60, of Cortland, as well as the parent companies of their respective businesses — Dark Horse Tavern, A Pizza and More, Hairy Tony’s, and Dasher’s Corner Pub — pleaded guilty to Criminal Tax Fraud for underreporting more than $4 million in taxable sales. As part of their pleas, the defendants repaid the state the full $479,203.03 they owed to New York.

“We will not allow anyone to get away with stealing from the state’s coffers,” said Attorney General James. “These guilty pleas ensure that these establishments finally pony up the cash they illegally pocketed and rein in their dishonest behavior. I want to thank Acting Commissioner Hiller for her leadership and her department’s critical work in protecting New York taxpayers.”

“Business owners who blatantly disregard their obligation to pay over the sales taxes they collected from their customers deprive the communities where they operate of revenue needed for vital services and put similar businesses at an unfair disadvantage,” said Acting Commissioner Hiller. “I thank the Attorney General for her partnership on this case, and we’ll continue to work with all our law enforcement partners to bring these criminals to justice.”

A joint investigation by the Office of Attorney General (OAG) and the Department of Taxation and Finance revealed that — between 2010 and 2015 — Seibel and Caruso collectively underreported a total of more than $4 million in taxable sales, and failed to remit over $475,000 in sales tax collected from their six different restaurants and bars throughout Cortland and Onondaga Counties.

Seibel and Caruso registered APAM, LLC with New York state and subsequently opened three pizzerias named A Pizza and More, located in Cortland, Homer, and Tully, New York. A Tax Department audit of sales tax returns for the period between December 1, 2011 and May 31, 2015 revealed that Seibel and Caruso underreported A Pizza and More’s taxable sales by $1,948,166.04. As a result, Seibel, Caruso, and APAM failed to remit $158,653.28 in sales tax due to New York state.

Caruso individually registered Anthony Caruso, LLC with New York state and opened Hairy Tony’s, a pub located in Cortland, New York. A Tax Department audit of sales tax returns for the period between December 1, 2010 and May 31, 2015 revealed that Caruso underreported Hairy Tony’s taxable sales by $1,637,649.90, and failed to remit $131,024.98 in sales tax due to New York state.

Seibel individually registered Academy Avenue Enterprises, Inc. with New York state and opened Dark Horse Tavern in Cortland, New York. A Tax Department audit of sales tax returns for the period between March 1, 2012 and November 30, 2015 revealed that Seibel underreported Dark Horse Tavern’s taxable sales by $1,098,799.73, and failed to remit $90,895.47 in sales tax due to New York state.

Seibel also individually registered James & Main, LLC with New York state and opened Dasher’s Corner Pub, a pub and restaurant located in Homer, New York. A Tax Department audit of sales tax returns for the period between June 1, 2012 and May 31, 2015 revealed that Seibel failed to remit $98,629.32 in sales tax due to New York state.

In December 2019, APAM pleaded guilty before the Honorable Gerald Keene in Cortland County Court to Criminal Tax Fraud in the Third Degree — a Class D felony — and paid all sales tax owed in full.

Also, in December 2019, Seibel and James & Main, LLC each pleaded guilty before the Honorable William J. Foley in Homer Town Court to Criminal Tax Fraud in the Fifth Degree — a Class A misdemeanor — pertaining to their failure to remit sales tax concerning Dasher’s Corner Pub. All sales tax owed by Dasher’s Corner Pub has been paid in full, and Seibel was sentenced to a one-year conditional discharge.

On Friday, before the Honorable Gerald Keene in Cortland County Court, Seibel pleaded guilty to two additional counts of Criminal Tax Fraud in the Fifth Degree pertaining to his failure to remit sales tax concerning APAM and Dark Horse Tavern, and Caruso pleaded guilty to two counts of Criminal Tax Fraud in the Fifth Degree pertaining to his failure to remit sales tax concerning APAM and Hairy Tony’s. Additionally, Academy Avenue Enterprises, Inc. and Anthony Caruso, LLC also pleaded guilty to one count of Criminal Tax Fraud in the Fifth Degree pertaining to the Dark Horse Tavern and Hairy Tony’s respectively. All sales tax owed by Dark Horse and Hairy Tony’s have been paid in full. Seibel and Caruso were both sentenced to one-year conditional discharges.

The OAG wishes to thank the Department of Taxation and Finance for their valuable assistance in this investigation.

The investigation by OAG was conducted by Detective Investigator Joel Cordone, under the supervision of Supervising Detective Richard Doyle and Deputy Chief Antoine Karam. The Investigations Bureau is led by Chief Oliver Pu-Folkes.

The case is being prosecuted by Assistant Attorney General Andrew J. Tarkowski of the Criminal Enforcement and Financial Crimes Bureau, with the assistance of Senior Analyst Joseph Conniff under the supervision of Supervising Analyst Paul Strocko and Deputy Supervising Analyst Jayleen Garcia. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph G. D’Arrigo. The Division of Criminal Justice is led by Chief Deputy Attorney General for Criminal Justice José Maldonado and overseen by First Deputy Attorney General Jennifer Levy.

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