TAX NEWS - June 2010

NY Tax: Solvay man gets six years for federal tax and money laundering

ALBANY - Donald Geiss, Jr., 34, was sentenced to 72 months imprisonment, to be followed by three years of supervised release, and ordered to pay $1,671,552.90 in restitution to Intertek Testing Service located in Cortland, New York. 

Geiss was a former director of Health and Safety at Intertek.  He pled guilty on February 21, to one count of tax evasion and one count of money laundering.  Geiss admitted that he prepared and submitted false invoices to Intertek totaling $1,630,407.00.  These invoices fraudulently represented that services were provided to Intertek, which in fact never were provided.  Geiss caused $1,457,107.00 of the fraudulently obtained funds to be deposited into the Interest on Lawyer Account (IOLA) of attorney David Pelland.

The monies were then withdrawn from the Pelland account to pay various expenses, including Geiss' personal expenses.  All fraudulently obtained funds were omitted from Geiss' federal income taxes which resulted in an under reporting of income to the IRS.  In 2005 alone, Geiss under reported his taxable income by $370,200.00 thereby evading tax due and owing in the amount of  $119,686.00. 

Pelland, 61, of Baldwinsville, pled guilty on May 4, to one count of conspiring to commit mail fraud in connection with his participation in the Intertek fraud scheme. He admitted that he allowed his IOLA account to be used to receive the funds Geiss fraudulently obtained from Intertek.  Pelland is scheduled to be sentenced on September 3.