Meriden, Connecticut Developer Guilty of Tax Fraud

[vc_row][vc_column][vc_column_text]Cariati Developers Inc. owner Donald Cariati will be sent top prison for one year and one day, a sentence that comes several months after he plead guilty to federal tax fraud charges.  The sentence will be followed by one year of supervised release.

During his sentencing in Hartford federal court, U.S. District Court Judge Michael P. Shea ordered Cariati to pay a more than $1 million restitution and a $95,000 fine.

In late February, Cariati pleaded guilty to one count of obstructing the Internal Revenue Service by not withholding income tax from the paychecks of Cariati Developers Inc. employees. Federal prosecutors estimated the tax loss to the IRS was between $550,000 and $1.5 million,

John Durham’s office said the payments were withheld from 2013 to 2017, when Cariati paid several employees with CDI company checks asserting they were either independent contractors or subcontractors to avoid withholding taxes to the IRS. However, Durham said, the company failed to use tax forms 1099 for those employees during the years in question.

“Cariati also informed certain individuals that they were being paid off the books, meaning that their pay was not reported to the IRS,” Durham’s office stated.

The IRS began an audit in 2015. During that audit Cariati provided an IRS revenue agent with fraudulent invoices that were purportedly created in 2013. They “purported to substantiate the individuals were appropriately considered subcontractors,” the news release said.

Furthermore, investigators found a separate invoice that falsely made the purchase of products for Cariati’s personal cigarette boat appear as those it was a business expense, not a personal expense.

After pleading guilty and before the sentencing, Cariati was still an active alternative member of the Meriden Planning Commission. In addition to his membership on that board, Cariati also served on the city’s Planning of Conservation and Development Steering Committee and on the Aviation Commission.[/vc_column_text][us_image image=”2037″][/vc_column][/vc_row]