Genovese Connected Contractor Charged with Tax Evasion

[TSNYC]

Owners of Brooklyn Plumbing Company Indicted for Evading Taxes on More Than $10 Million in Income

Wednesday, December 6, 2023
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For Immediate Release
U.S. Attorney's Office, Eastern District of New York
Defendants Allegedly Falsely Claimed That Personal Expenses, Including Disney World Vacation, Clothing, Purchase of Homes and a Yacht, Were Business Expenses
An indictment was unsealed earlier today in federal court in Brooklyn charging Alexander Figliolia, Jr., and Kenneth Sutherland, the owners of Liberty Water & Sewer (Liberty Water), a Brooklyn-based plumbing company which they operate as a partnership, with tax evasion and conspiracy to defraud the United States. Figliolia, Jr., and Sutherland were arrested earlier today, and their initial appearances are scheduled for this afternoon before United States Magistrate Judge James R. Cho.

Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI), announced the arrests and charges.

“Business owners like everyone else have an obligation to pay their fair share of taxes,” stated United States Attorney Peace. “As alleged, the defendants made millions of dollars repairing water and sewer lines for New York City residents, but instead of dutifully paying the taxes they owed, they improperly classified more than $10 million of personal expenses as business expenses. Their greed drained the government’s coffers of nearly $4 million in tax revenue.”

“Figliolia and Sutherland were living the lavish life while allegedly failing to report more than ten million dollars in income. The yachts, jewelry and family trips were all paid for with money owed to the federal government. Today’s indictment is a message to all those who choose to evade taxes, one day your extravagant lifestyle on the taxpayer dime will come to an end, and you will be prosecuted for your actions,” stated IRS-CI Special Agent-in-Charge Thomas Fattorusso.

“The defendants, as charged, evaded taxes on millions of dollars of income from the business they conducted in New York City, by misclassifying lavish personal expenses as business expenses to reduce their tax burden. I thank our federal law enforcement partners for their commitment to hold corrupt contractors in this City accountable,” stated DOI Commissioner Strauber.

"The alleged greed and abuse of trust here are unconscionable. Pocketing funds to support an extravagant lifestyle is an afront to hardworking taxpayers who depended on these men to do honest work," said James Smith, Assistant Director in Charge of the FBI New York Field Office. “The FBI is committed to working with our law enforcement partners to investigate allegations of significant financial crime and holding the people behind them accountable for their actions.”

As alleged in the indictment and other court filings, between January 2017 and June 2020, the defendants evaded personal income taxes by issuing checks and wiring money from Liberty Water’s bank account to pay for personal expenses. The defendants classified these payments of their personal expenses as business expenses of Liberty Water, thereby reducing Liberty Water’s profits and reducing the defendants’ personal income tax burdens. For example, Figliolia, Jr., and Sutherland classified more than $1.75 million of personal credit card expenses, including home renovations, a family trip to Disney World, jewelry, clothing and veterinary expenses, as business expenses. As another example, Figliolia, Jr., and Sutherland obtained loans of more than $2.8 million on personal life insurance policies, and repaid the loans using Liberty Water funds, allowing them to siphon that money out of the business without paying taxes. As still another example, Figliolia, Jr., issued more than $4 million in checks from Liberty Water’s bank account to a law firm for the payment of personal expenses, including the purchase of multiple properties and a yacht, but classified them as business expenses of Liberty Water.

In total, Figliolia, Jr., and Sutherland intentionally diverted approximately $10,225,213 from Liberty Water between tax years 2017 and 2019, resulting in the evasion of approximately $3,933,046 in federal taxes.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face a maximum sentence of five years’ imprisonment on each count.

The government’s case is being handled by the Office’s Public Integrity Section. The government’s case is being prosecuted by Assistant United States Attorneys Philip Pilmar and Dana Rehnquist.

The Defendants:

ALEXANDER FIGLIOLIA, JR.
Age: 50
Staten Island, NY

KENNETH SUTHERLAND
Age: 62
Staten Island, NY

E.D.N.Y. Docket No. 23-CR-498





***background article here:

https://nypost.com/2003/05/19/mta-case- ... f-plumber/

[Pmac2]

Old way of making money. Goes on everywhere

[SonnyBlackstein]

Is there an LCN connection here?

[Wiseguy]

Is there an LCN connection here?

Just that Figliolia is an LCN associate. He was last charged in 2003 and was identified at the time as being connected to Alan Longo.

[SonnyBlackstein]

Cheers

[Tonyd621]

Cheers

If you read the article you will see it.
Alan Longos son is involved as well. If you have the time to read the article, it is very interesting.

[Tonyd621]

Cheers

The background article that is.

[Tonyd621]

As someone who is familiar with the construction industry. This type of tax write off stuff happens all the time. However, they were very greedy and it was so egregious that they were asking for the govt to investigate them. More over, anytime you have contracts with any state entity the red tape you have to go through is exhausting. You better do everything on the up and up

[SonnyBlackstein]

Cheers

If you read the article you will see it.
Alan Longos son is involved as well. If you have the time to read the article, it is very interesting.

Thanks Tony.

[johnny_scootch]

Cheers

If you read the article you will see it.
Alan Longos son is involved as well. If you have the time to read the article, it is very interesting.

Thanks Tony.

Alan Longo’s son is not involved in this case at all. That NY Post article is from 20 years ago.

[Tonyd621]

Cheers

If you read the article you will see it.
Alan Longos son is involved as well. If you have the time to read the article, it is very interesting.

Thanks Tony.

Alan Longo’s son is not involved in this case at all. That NY Post article is from 20 years ago.

I was referencing the article I read that was attached to the thread.

[johnny_scootch]

Cheers

If you read the article you will see it.
Alan Longos son is involved as well. If you have the time to read the article, it is very interesting.

Thanks Tony.

Alan Longo’s son is not involved in this case at all. That NY Post article is from 20 years ago.

I was referencing the article I read that was attached to the thread.

I know what you were referencing events that took place decades ago and have no bearing on this new indictment. Sonny asked if there was an LCN connection and Wiseguy gave the correct answer.

[SonnyBlackstein]

Cheers

If you read the article you will see it.
Alan Longos son is involved as well. If you have the time to read the article, it is very interesting.

Thanks Tony.

Alan Longo’s son is not involved in this case at all. That NY Post article is from 20 years ago.

I was referencing the article I read that was attached to the thread.

I know what you were referencing events that took place decades ago and have no bearing on this new indictment. Sonny asked if there was an LCN connection and Wiseguy gave the correct answer.

Thanks for clarafication Johnny. Appreciated.

[johnny_scootch]

. However, they were very greedy and it was so egregious that they were asking for the govt to investigate them.

There was a previous investigation these guys were involved in and the Feds couldn’t pin anything on them so they picked the low hanging fruit and hit them with the tax charges. I do agree though it was egregious and they were almost asking for it, if you knew Alex you’d understand he’s a rub it in your face kind of guy.

[TSNYC]

Both Alex Jr and Sr did state time on that older case from Manhattan da … prior conviction certainly won’t help out his guidelines range for federal tax case