A Freehold resident pleaded guilty to charges of defrauding the state out of hundreds of thousands of dollars, according to Acting Attorney General John H. Hoffman.
Philip R. Kossoy, 49, is accused of concealing income from his business Absolutely Spotless Home Cleaning Professionals Inc. to keep from making tax payments by failing to disclose property received and failure to pay taxes on that and other income.
With the guilty plea Kossoy will admit that from January 2008 through July 2011 he was involved in a scheme to disguise and conceal income from the state amounting to hundreds of thousands of dollars. This was done by underpaying the New Jersey Gross Income TAx, State Sales Tax and New Jersey Corporate Business Tax. A press release from the Attorney General’s Office said that included sales taxes he collected but did not send to the state.
Kossoy pleaded guilty to third-degree charges of theft by failure to make required disposition of property received and failure to pay taxes in front of Superior Court Judge Anthony J. Mellaci Jr. in Monmouth County.
Part of the scheme included taking cash payments from customers and depositing them into personal accounts rather than business accounts. He also worked to disguise the source of the funds by having checks made payable to him rather than the business. The investigation showed 192 instances where Kossoy changed customer checks by blacking out the memo section which mentioned his business. He also reportedly deposited more than $1 million in cash and checks into personal accounts that were created using another person’s social security number.
“Tax fraud is costly to the state and an affront to the honest residents and business operators who pay their fair share,” Hoffman said. “We will aggressively prosecute tax cheats, make them pay, and secure convictions that will deter others from these crimes.”
Elie Honig, the Director of the Division of Criminal Justice said it is an important part of the work her office does. “Working with forensic auditors in the Division of Taxation, we are targeting tax evaders and individual who steal from the state by obtaining tax refunds through fraud.” She added, “Our message is this — those who try to cheat the state will face tough criminal penalties, in addition to civil penalties.”
State Treasurer Andrew Sidamon-Eristoff added, “The result in this case shows what state agencies can achieve when they work together to protect taxpayers and the public from people who want to scam the system.”
As part of the plea agreement Kossoy will pay $1.1 million to the state which includes $900,000 in unpaid taxes, penalties and interest as well as a $200,000 anti-money laundering penalty. He will forfeit $424,000 in funds in bank accounts seized by the state and will pay the remaining $676,000 at the plea hearing. It has been recommended by the state that he serve 364 days in county jail.
The plea agreement was taken by Deputy Attorney General Peter Gallagher for the Division of Criminal Justice Financial & Computer Crimes Bureau after an investigation by the Division of Taxation Office of Criminal Investigation and Division of Criminal Justice. The case was investigated for the Division of Taxation Office of Criminal Investigation by Criminal Forensic Auditors Kery Czymek and Kevin Curry as well as Supervising Forensic Auditor Debra Lewaine. The investigation for the Division of Criminal Justice Financial & Computer Crimes Bureau was handled by Det. Anne Hayes, Deputy Attorney General Gallagher and Deputy Attorney General John Nicodemo. Deputy Attorney General Derek Miller handled the criminal forfeiture action. The division of Consumer Affairs also provided assistance.
Sentencing has been set for January 3.