The owner of a Hamden deli was sentenced Tuesday to nine months of imprisonment for failing to report about $638,173 of his income.
Raymond George, 53, of Hamden, who owns Ray & Mike’s Dairy & Deli at 3030 Whitney Ave., pleaded guilty in May to one count of tax evasion.
U.S. District Judge Stefan R. Underhill imposed the sentence in a proceeding in Bridgeport. After George serves his sentence, he will be on supervised release for one year. Underhill also ordered George to pay a $5,000 fine.
According to the U.S. Attorney’s office, George underreported his income on his federal tax returns by approximately $365,065 for the 2012 tax year and by $273,108 for the 2013 tax year. As a result, he failed to pay about $220,000 in taxes owed to the government.
George has paid the Internal Revenue Service approximately $480,000, which includes not only back taxes, but interest and penalties.
He is free on a $100,000 bond and must report to the Federal Bureau of Prisons to begin serving his sentence on March 17, 2020.
George’s defense attorney, Lisa Perkins with the firm of Green & Sklarz in New Haven, had asked for a sentence of home confinement for her client. Perkins asserted in a pre-sentencing memorandum that any incarceration would have a negative effect on George’s 14 employees.
“Mr. George understands the wrongfulness of his conduct and has fully accepted responsibility for that conduct,” Perkins wrote in the memorandum.
Assistant U.S. Attorney Michael S. McGarry, in the government’s pre-sentencing report, asked the judge to impose a period of incarceration. McGarry called George “a millionaire a number of times over” with a net worth of $4.3 million who drew a salary of roughly $240,000 per year.
“He certainly was not struggling financially,” McGarry said. “He has paid himself a salary that is significantly higher than most Americans could ever hope to make.”
McGarry asserted that George could hire a store manager or designate a current employee to act in his place so his business can continue without interruption.
“There is no doubt that [his] offense is serious based not only on the magnitude of the tax loss of nearly a quarter of a million dollars, but also on the extensive, somewhat even sneaky means by which George executed his multi-year tax evasion scheme,” McGarry wrote.
George opened the deli in 1997. It is located near the Quinnipiac University campus and attracts customers from the university and region. The business sells sandwiches, groceries, and convenience-store staples. George owns 99 percent of the business, while a partner, who was not charged, owns one percent, court documents show.
According to the U.S. Attorney’s office, George took various steps to hide his earnings, such as not depositing all of the deli’s cash receipts into his business bank account. George also used the business account to pay for his personal expenses. George deposited about $299,478 in checks from his company’s business account into a personal investment account. He then withdrew $160,000 to buy investment properties in Florida, according to the plea agreement and stipulation of offense conduct.
George also deposited $25,800 from the deli’s lottery account into his personal investment account, according to the U.S. Attorney’s office. None of these funds were reported to the government as income.