The owner of a West Haven-based transportation business pleaded guilty on Monday in U.S. District Court to one count of subscribing a false tax return.
William Scalzi, 61, of Durham, entered the plea in a proceeding before U.S. District Judge Victor A. Bolden in Bridgeport. Scalzi is the owner of Transportation General Inc., well-known as Metro Taxi and now branded as M7. The 31-year-old company provides transportation services via taxicab and luxury and handicapped-accessible vehicles, and it operates in the greater New Haven, Bridgeport and Hartford areas.
Scalzi faces a maximum of three years of imprisonment at his sentencing, which has not yet been scheduled. However, the plea agreement shows sentencing guidelines in Scalzi’s case call for a range of six to 12 months of imprisonment.
According to the U.S. Attorney’s office, Scalzi has agreed to make $297,319 in restitution to the Internal Revenue Service. The amount covers Scalzi’s criminal and civil tax liabilities for taxes owed for 2007 through 2010.
Scalzi may also be fined, with sentencing guidelines showing a likely fine range of $2,000 to $20,000, according to the U.S. Attorney’s office.
The IRS and federal prosecutors accused Scalzi of understating his taxable income by running personal expenses through his company.
Assistant U.S. Attorney Douglas Morabito is prosecuting the case. According to the U.S. Attorney’s office, Scalzi used his company’s credit cards to pay for personal expenses, then falsely claimed these were actually business expenses and deducted them on his company’s corporate tax returns.
Scalzi also did not include these personal expenses as income on his personal tax returns for the 2007 through 2010 tax years, prosecutors said.
Scalzi issued a written statement through his attorney, Stanley Twardy of Day Pitney in Stamford.
“When sending my tax-related information for 2010 to my accounting firm and when working with them, I did not take the appropriate steps to ensure that certain business and personal expenses had been properly allocated before signing my tax return,” the statement says. “As a result, my tax return in 2010 was not accurate. I deeply regret this failure, which is not consistent with the standard to which I have held myself for the last 31 years of running my company.”
Twardy noted that the $297,319 in restitution includes about $40,000 in unpaid taxes, plus penalties and interest.
“He owed less than $40,000 in taxes for the four years, from 2007 to 2010, but penalties and interest made the amount of restitution much higher,” Twardy said.
Contact Michelle Tuccitto Sullo at msullo@NewHavenBiz.com
