A Freehold man was sentenced to just under a year in county jail after pleading guilty to a variety of charges stemming from some dirty dealings with his cleaning business.
Acting Attorney General John Hoffman announced that 49-year-old Philip R. Kossoy, owner of Spotless Home Cleaning Professionals Inc., was sentenced to 364 days in jail and two years of probation by Superior Court Judge Anthony J. Mellaci.
The plea of third degree theft by failure to make required disposition of property received and failure to pay taxes came as a result of Kossoy reportedly defrauding the state out of hundreds of thousands of dollars in tax payments from his mold remediation business.
Prior to the sentencing Kossoy paid $1.1 million to New Jersey including $900,000 in unpaid taxes, penalties and interest as well as a $200,000 anti-money laundering penalty. He forfeited $424,000 from bank accounts that were seized by the state and paid $676,000 at the plea hearing.
As part of the plea agreement Kossoy admitted that from January of 2008 through July of 2011 he worked to disguise and conceal income from the state by underpaying New Jersey Gross Income Tax, State Sales Tax and New Jersey Corporate Business Tax. That included sales tax he collected but did not send to the state.
His efforts included taking cash payments from customers and depositing them into personal bank accounts rather than a business account. He also attempted to disguise the source of the money by having customers make checks payable to him rather than to the business.
In 192 instances Kossoy is alleged to have altered customer checks by blacking out the memo section. He also deposited more than $1 million in cash and checks into accounts opened using someone else’s Social Security Number.
“Tax fraud of this nature is nothing short of stealing from the state and its honest taxpayers, who then are forced to pay higher taxes to cover the deficit,” Hoffman said. “Through cases such as this one, we are sending a loud and clear message that business owners who cheat the state and fail to remit taxes will be prosecuted as criminals.”
Director Elie Honig of the Division of Criminal Justice said Kossoy’s case is part of a concerted effort to battle tax issues in the state. “Would-be tax cheats have a simple choice: pay now or pay later, when you may face time behind bars as well as civil penalties.” She added, “We are working closely with the Division of Taxation to detect and prosecute tax evaders.”
The case was handled by Deputy Attorney General Peter Gallagher. The investigation was conducted by Division of Taxation Office of Criminal Investigation and the Division of Criminal Justice. The case was investigated for the Division of Taxation Office of Criminal Investigation by Criminal Forensic Auditors Kerry Czymek and Kevin Curry as well as Supervising Forensic Auditor Debra Lewaine.
Det. Anne Hayes, Deputy Attorney General Gallagher and Deputy Attorney General John Nicodemo handled the investigation for the division of Criminal Justice Financial & Computer Crimes Bureau and Deputy Attorney General Derek Miller handled the criminal forfeiture action. The Division of Consumer Affairs also provided assistance.