WHO IS THIS?

It is a picture of Congressman Adriano Espaillat in Washington D.C. wearing a cowboy hat similar to Ruben Diaz's own trademark. Imitation is the sincerest form of flattery, or is Congressman Espaillat getting ready to welcome 15th Congressional candidate Ruben Diaz to Washington?

DOI AND SCI RELEASE STATEMENT OF FINDINGS ON JOINT INVESTIGATION INTO DELAYS AND POLITICAL INFLUENCE OF THE CITY DEPARTMENT OF EDUCATION’S INQUIRY OF EDUCATION STANDARDS AT HASIDIC YESHIVAS

 Margaret Garnett, Commissioner of the New York City Department of Investigation (“DOI”), and Anastasia Coleman, the Special Commissioner of Investigation for the New York City School District (“SCI”), issued a statement of findings today on their agencies’ joint investigation into the process of the New York City Department of Education’s (“DOE”) inquiry into whether the education provided at certain Hasidic Yeshivas is “substantially equivalent” to the education provided in City public schools. A copy of DOI and SCI’s statement of findings is attached and can also be found at DOI’s and SCI’s websites at the following respective links: https://www1.nyc.gov/site/doi/newsroom/press/2019/december.page https://nycsci.org/press-releases/

 The joint investigation concluded that political horse-trading between the Mayor’s and State legislators’ representatives unquestionably occurred. According to the investigation, the representatives agreed in 2017, as part of a multi-pronged effort, to delay an interim report of the DOE’s findings in an attempt to secure support for extending mayoral control of the City’s schools. However, the investigation also found that this agreement had no substantial effect on the inquiry’s conclusion or the progress of the inquiry, which was mired in delays for several years because of a variety of factors, including conflicts with the yeshivas and their counsel and a generally accommodating approach taken by DOE to that conflict. Further, the evidence uncovered during this joint investigation did not demonstrate whether the Mayor had personally authorized the agreement to delay the DOE report; however, the totality of the evidence did indicate the Mayor was aware that the offer to delay had been made.

 DOI and SCI found no evidence of any violations of relevant laws or regulations and did not identify any criminal conduct in connection with the release of DOE’s interim report.DOI and SCI found no evidence of any violations of relevant laws or regulations and did not identify any criminal conduct in connection with the release of DOE’s interim report.

BRONX MAN, HIS MOTHER INDICTED IN MURDER-FOR-HIRE PLOT

Enlisted Undercover Cop to Kill Man to Keep Him from Testifying Against the Son, Who Had Allegedly Shot Him in Dispute

 Bronx District Attorney Darcel D. Clark today announced that a Bronx man and his mother have been indicted for conspiring to kill a man to prevent him from testifying against the son, who allegedly had shot and wounded the man during a dispute. 

 District Attorney Clark said, “The defendants allegedly enlisted an undercover detective who was posing as a hitman, to allegedly kill a victim who survived being shot five times. The defendants paid $1,000 to the “hitman” as a down payment on the murder. These defendants allegedly tried to silence a victim and subvert our criminal justice system in the most heinous way.” 

 District Attorney Clark said the defendant, Candido Lizarro, AKA Candido Lizarra, 26, of 1010 East 170th Street, was indicted on Attempted Murder in the second degree, first-degree Assault, two counts of second-degree Assault, third-degree Assault, first-degree Criminal Use of a Firearm, second-degree Criminal Use of a Firearm, second-degree Criminal Possession of a Weapon, Criminal Possession of a Firearm, and fourth-degree Criminal Possession of a Weapon. Both Lizarro and Annette Spann, 45, of 1010 East 170th Street, were indicted on three counts of second-degree Conspiracy and three counts of second-degree Criminal Solicitation. Spann was arraigned today before Bronx Supreme Court Justice Robert Neary and bail was set at $150,000 bond or $50,000 cash or $150,000 bond partially secured at ten percent. Lizarro was arraigned on December 13, 2019 before Bronx Supreme Court Justice Robert Torres and remanded. They are due back in court on February 19, 2020.

 According to the investigation, on September 2, 2019, Lizarro allegedly shot a man five times in the back in the lobby of a NYCHA building at 1010 East 178th Street because of a dispute. The victim survived his wounds. 

 According to the investigation, Lizarro fled the state and began communicating with the undercover detective through texts, saying things such as, “I need this done man,” and that if it weren’t for the surviving victim “I wouldn’t be in the jam right now…”

 On November 14, 2019, Lizarro made a video call to Spann and the undercover during which Spann can be seen counting out $1,000 in 10 one-hundred-dollar bills. Spann also described specific places the intended target frequented.

 District Attorney Clark thanked NYPD Detective Ravi Narayan from Firearms Investigations Unit, Detective Victor Cardona and Police Officer John Uske from Brooklyn North Field Intelligence Unit, Detective Randy Kyrk from Bronx Warrants Squad and Detective Andrew Nash of the 48th Precinct Detective Squad.

An indictment is an accusatory instrument and not proof of a defendant’s guilt.

Bronx Democratic Party - Save The Date For Our First 2020 DEMS TALK

Happy Thursday, As this year comes to an end, we couldn't be more excited about the new and familiar faces we've seen at each of our DEMS TALK. We hope to continue this momentum well into the new year. Save the date for our first 2020 DEMS TALK: Tuesday, January 21 at 6:30PM. Bronx Dems Headquarters 1534 Boone Avenue The Bronx, NY 10460 Sincerely, The Bronx Democratic Party

THE NEW YORK STATE FILM AND TELEVISION DIVERSITY CREDIT SIGNED INTO LAW BY GOVERNOR CUOMO

The bill passed by Assembly Member Marcos A. Crespo and Senator Robert Jackson promoting minority writers and directors within the New York State Film and Television Industry (A.6683B / S.5864-A) was signed into law by Governor Cuomo. This chaptered law will support a study of the disparity of diverse writers and directors in film industry and incentivize companies participating in New York's film tax credit program to hire more women and minority television writers and directors.

In his approval memorandum, Governor Andrew Cuomo wrote, “The bill would create a tax credit for qualified production companies that employee women and minority writers and directors who work on television programs by a allowing a new refundable tax credit for television writers’ and directors’ fees and salary costs. The bill advances a laudable goal and builds on the success of New York’s Film Tax Credit.”

Assembly Member Marcos A. Crespo said, “The New York State Film and Television Tax Credit has proven to be an extremely successful program as it has expanded the growth of the film and television industry in New York State.  Although it has fostered tremendous economic opportunities what it has failed to do is open doors for the incredibly innovative and creative minds of women and people of color throughout our neighborhoods such as a South Bronx. With this legislation, we will ensure that this growing industry also allows for the participation of this talent pool. It is important that the stories we hear and watch on screen reflect the true diversity of all communities in NYS and the nation. I am proud to have carried this legislation. Thank you to the advocates for their passion and efforts and to the Governor for signing this bill into law.”

State Senator Robert Jackson said, "I'm proud to have the Governor's signature on this bill. By encouraging greater racial and gender diversity among writers and directors of TV shows, we are doing important work upstream to make sure that we have relevant, culturally sensitive, and powerful portrayals on-screen that reflect the diversity of our city, our state, and our country."

Neil Dudich, Eastern Executive Director of Directors Guild of America, said, "We commend Governor Cuomo for signing this important bill into law, encouraging television employers to discover the full range of New York's talented directors and writers. We are incredibly grateful to the bill's sponsors Assemblyman Marcos Crespo and State Senator Robert Jackson for taking a stand on this important issue, to our partners in this effort, the Writers Guild of America, East, and to New York’s broader labor and film community who provided their support. For years the DGA has pushed the industry to adopt more diverse and inclusive hiring practices, and we will continue to fight for fairness for all directors.”

The television production industry continues to grow in New York thanks to the success of the New York State Film Tax Credit.  According to the Mayor's Office of Media and Entertainment, the 2015-16 television season saw 52 prime time television series produced in New York City, an increase of 13% over the previous television season. Shows for broadcast, cable, and digital networks are increasingly choosing New York as the location to film.
   

IMPORTANT MESSAGE FROM SENATOR BIAGGI: HOLIDAY OFFICE CLOSINGS

CLOSED FOR THE HOLIDAYS! The offices of State Senator Alessandra Biaggi will be closed December 23rd, 2019 through Janurary 3rd, 2020. Happy Holidays to you and your loved ones, we'll see you in the New Year!

MAYOR DE BLASIO AND NEW YORK STATE ATTORNEY GENERAL JAMES ANNOUNCE SETTLEMENT WITH STARBUCKS FOR VIOLATIONS OF CITY’S PAID SAFE AND SICK LEAVE LAW

Starbucks to create $150,000 restitution fund for all New York City employees whose Paid Safe and Sick Leave rights they violated and promote public education about the Law

  Mayor Bill de Blasio, Department of Consumer and Worker Protection Commissioner Lorelei Salas and New York State Attorney General Letitia James today announced a settlement with Starbucks, the largest coffee retailer in the world, to resolve violations of the New York City Paid Safe and Sick Leave Law.

A lengthy joint investigation that included multiple subpoenas, review of records, and interviews with Starbucks workers found that Starbucks had an illegal sick leave policy that required employees to find a substitute when they used sick leave and that if an employee failed to find that substitute, it could result in “corrective action, up to and including termination of employment.” During the investigation, Starbucks corrected its policy and is now compliant with the Paid Safe and Sick Leave Law. The settlement requires Starbucks to pay restitution to current and former employees who were impacted by its illegal sick leave policy, to post an educational poster about Paid Safe and Sick Leave in all New York City stores, to notify all current New York City employees that they are covered by the City’s Law and are not required to find a replacement worker to use sick leave, and to submit a compliance report.

“In New York City, no corporation is above the law,” said Mayor Bill de Blasio. “In partnership with Attorney General James, the Department of Consumer and Worker Protection found widespread violations of our Paid Safe and Sick Leave law, and thanks to their investigation, workers will now be able enjoy the rights they are entitled to and get the restitution they are owed.”

“It is frustrating that a major corporation like Starbucks with over 8,000 employees in New York City had an illegal sick leave policy to begin with,” said DCWP Commissioner Lorelei Salas. “But we appreciate that they corrected the policy, have agreed to compensate the employers who were negatively affected, and will be taking additional steps to help ensure all New Yorkers know about their rights. New York is committed to protecting workers and we want this case to be a message to all employers: no one is above the law. We will pursue any employer that violates their workers’ rights.”

“Workers in New York City are entitled to paid sick leave. This settlement should serve as a notice to all employers in New York City that we will always prioritize the rights of workers,” said Attorney General Letitia James. “I am confident in the steps that Starbucks has taken to correct their actions, and I thank the Department of Consumer and Worker Protection for their partnership on this important issue.”

Under the settlement, Starbucks must:

·         Pay restitution to affected workers.

o   Starbucks must hire a third-party claims administrator to create and maintain a restitution fund for any current or former covered employees. Covered employees worked 80 hours or more at Starbucks stores in New York City between January 1, 2015 and December 31, 2016 and were required to find a replacement in order to use sick leave and/or were disciplined for not finding a replacement to use sick leave. In the upcoming months, Starbucks must retain the independent claims administrator and notify all covered employees about submitting a claim for restitution. Employees will have 90 days from the mailing of the initial notice to submit a claim. Starbucks must make an initial payment of $150,000 to the fund but if funds are exhausted, it is responsible for any unpaid claims.

o   Starbucks must also pay $26,000 in restitution to DCWP, which will be distributed to 23 workers identified during the investigation.

·         Post an educational poster about the NYC Paid Safe and Sick Leave Law in all of its New York City stores. The posters must be posted within 45 days in a prominent, public location where all workers and customers can easily see it.

·         Distribute a plain language notice about its sick leave policy to all current employees. The notice must state that they are covered by the NYC Paid Safe and Sick Leave Law and are not required to search for or find a replacement worker to use sick leave.

·         Maintain a compliant sick leave policy and submit a compliance report to DCWP and the Attorney General within six months. Any future violations will be subject to increased fines.

Under New York City’s Paid Safe and Sick Leave Law, employers with five or more employees who work more than 80 hours per calendar year in New York City must provide paid safe and sick leave to employees. Employers with fewer than five employees must provide unpaid safe and sick leave. All covered employers are required to provide their employees with the Notice of Employee of Rights that includes information in English and, if available on the DCWP website, the employee’s primary language. Employers must provide the notice on the first day of an employee’s employment. Employers must have a written sick leave policy that meets or exceeds the requirements of the Law.

Safe and sick leave is accrued at a rate of one hour of leave for every 30 hours worked, up to 40 hours per calendar year, and begins on the employee’s first day of employment. Employees can begin using accrued leave 120 days after their first day of work. For employers who do not frontload safe and sick leave on the first day of a new calendar year, employees must be able to carry over up to 40 hours of unused safe and sick leave from one calendar year to the new calendar year.

If the need to use sick leave is foreseeable, employers can require up to seven days advance notice to use safe or sick leave. If the need is unforeseeable, employers may require notice as soon as practicable. Employers can require reasonable documentation for more than three consecutive workdays as safe or sick leave but it is illegal to require that documentation specify the reason for using safe or sick leave. Employers may not engage in or threaten retaliation against employees, which includes firing and any act that punishes an employee for or is likely to deter an employee from exercising their rights under the Law.

Employers and employees can visit nyc.gov/workers or call 311 (212-NEW-YORK outside NYC) for more information, including the required Notice of Employee Rights , one-page overviews for employers and employees, and the complaint form. DCWP also developed tools to help employers keep track of employees’ hours worked and safe and sick leave used, as well as model forms for verification of authorized safe and sick time used, safe and sick time.

Since the law went into effect, DCWP has received more than 2040 complaints about Paid Safe and Sick Leave, closed more than 1780 investigations, and obtained resolutions requiring more than $11,490,000 combined fines and restitution for more than 35,300 workers.

Carmel Attorney Pleads Guilty In White Plains Federal Court To Tax Evasion And Failure To Pay Over Payroll Taxes

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Jonathan D. Larsen, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today FRANCIS J. O’REILLY, a Carmel attorney, pled guilty to failure to pay over payroll taxes and tax evasion for the calendar year 2015.  O’REILLY pled guilty before U.S. Magistrate Judge Lisa Margaret Smith. 

U.S. Attorney Geoffrey S. Berman said:  “Francis O’Reilly is an attorney who has been in practice for three decades.  He certainly ought to know his obligations under the law at least as well as any non-lawyer.  And yet, today he admitted that he failed to pay over payroll taxes for years, and failed to report personal income and pay taxes due on that for years as well.  Now O’Reilly awaits sentencing for his crimes.”

IRS-CI Special Agent-in-Charge Jonathan D. Larsen said:  “Francis O’Reilly spent over two decades trying to evade his personal and business tax obligations using a multitude of schemes.  Not only did Mr. O’Reilly evade his own personal tax obligations, but he also stole payroll taxes collected from his own employees.  It is ironic that Mr. O’Reilly specialized in criminal defense, as his actions in this case are wholly criminal.  As we enter the beginning of the tax filing season, it’s important to remember the consequences associated with tax fraud and tax evasion.  Today’s guilty plea demonstrates to Mr. O’Reilly and all other criminals that these types of offenses will not be tolerated.  IRS-CI appreciates the assistance of the United States Attorney for the Southern District of New York in helping to bring Mr. O’Reilly to justice.”

According to the allegations contained in the Information to which O’REILLY pled guilty and statements made in court:       

In or about 1989, O’REILLY was admitted to practice law in New York State.  At all relevant times, O’REILLY was a self-employed attorney who maintained a law practice in Putnam County, New York (the “O’Reilly Law Practice”).  The O’Reilly Law Practice specialized in, among other things, bankruptcy, foreclosure defense, and criminal defense.

O’REILLY operated the O’Reilly Law Practice as a sole proprietorship.  In the calendar year 2015, O’REILLY had between approximately three and eight paid employees.  As the owner and operator of the O’Reilly Law Practice, O’REILLY exercised control over the O’Reilly Law Practice’s financial affairs and was a responsible person under federal law for collecting, truthfully accounting for, and paying over payroll taxes to the Internal Revenue Service (“IRS”). 

During the calendar year 2015, O’REILLY withheld payroll taxes from the salaries of some employees of the O’Reilly Law Practice and filed Forms 941, Employer’s Quarterly Federal Tax Returns, reporting substantial amounts of payroll taxes due and owing to the IRS.  However, O’REILLY failed to pay over the payroll taxes for employees of the O’Reilly Law Practice to the IRS as required by law.  Instead, O’REILLY spent the withheld payroll taxes, which O’REILLY was required to hold in trust for the United States Government, on personal and business expenses.

O’REILLY’s failure to pay over payroll taxes for 2015 was part of a long-running course of conduct.  Between 1997 and 2018, O’REILLY failed to pay over a total of approximately $155,771 in payroll taxes, resulting in a liability of approximately $232,283 after interest and penalties.

In addition to failing to pay over payroll taxes to the IRS, O’REILLY also committed personal tax evasion.  During the calendar year 2015, O’REILLY withdrew approximately $119,427 from his attorney trust account at KeyBank (the “Attorney Trust Account”) for personal use.  O’REILLY did not report the income he realized from the Attorney Trust Account on his 2015 Form 1040, United States Individual Income Tax Return, which O’REILLY prepared and filed with the IRS in or about April 2016.  Instead, O’REILLY’s 2015 Form 1040 declared only approximately $58,223 in business income and a corresponding tax liability in the approximate amount of $14,403, which O’REILLY did not pay. 

O’REILLY’s conduct with respect to his personal income taxes in 2015 was also part of a long-running tax evasion scheme.  During the calendar years 2013 through 2017, O’REILLY withdrew a total of approximately $481,673 from his Attorney Trust Account for personal use.  O’REILLY did not pay taxes on this income and did not report it on his federal individual tax returns.  In addition, O’REILLY failed to pay most of the taxes that O’REILLY reported on his tax returns for the calendar years 2007 through 2015 and 2018.  In total, in the calendar years 2007 through 2018, O’REILLY evaded the payment of approximately $566,027 in personal federal income taxes, including interest and penalties.

In or about late 2016, in an effort to settle his outstanding tax liabilities, including his personal tax liabilities for the calendar years 2002 through 2015 and payroll tax liabilities for the period 2006 through 2015, O’REILLY submitted an offer in compromise to the IRS proposing to settle at least approximately $691,561 in outstanding tax liabilities for merely $12,400.  In the 2016 offer in compromise, which O’REILLY signed under penalty of perjury, O’REILLY made several material misstatements and omissions regarding his income and assets.  Among other things, O’REILLY’s offer in compromise: (a) failed to disclose the existence of O’REILLY’s Attorney Trust Account, from which, as described above, O’REILLY drew substantial income; (b) failed to disclose real property and land that O’REILLY owned in Socorro County, New Mexico; and (c) failed to disclose a 2010 Lincoln vehicle that O’REILLY had recently purchased for approximately $16,000.

O’REILLY, 61, of Danbury, Connecticut, pled guilty to one count of failing to pay over payroll taxes and one count of tax evasion for the calendar year 2015, each of which carries a maximum sentence of five years in prison.  As part of the plea agreement, O’REILLY has agreed to pay restitution to the IRS in the amount of at least $801,969.  Sentencing is scheduled for April 22, 2020, at 2:00 p.m., before U.S. District Judge Kenneth M. Karas.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding work of IRS Criminal Investigation in this case.

This case is being prosecuted by the Office’s White Plains Division. Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Jonathan D. Larsen, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today FRANCIS J. O’REILLY, a Carmel attorney, pled guilty to failure to pay over payroll taxes and tax evasion for the calendar year 2015.  O’REILLY pled guilty before U.S. Magistrate Judge Lisa Margaret Smith. 

U.S. Attorney Geoffrey S. Berman said:  “Francis O’Reilly is an attorney who has been in practice for three decades.  He certainly ought to know his obligations under the law at least as well as any non-lawyer.  And yet, today he admitted that he failed to pay over payroll taxes for years, and failed to report personal income and pay taxes due on that for years as well.  Now O’Reilly awaits sentencing for his crimes.”

IRS-CI Special Agent-in-Charge Jonathan D. Larsen said:  “Francis O’Reilly spent over two decades trying to evade his personal and business tax obligations using a multitude of schemes.  Not only did Mr. O’Reilly evade his own personal tax obligations, but he also stole payroll taxes collected from his own employees.  It is ironic that Mr. O’Reilly specialized in criminal defense, as his actions in this case are wholly criminal.  As we enter the beginning of the tax filing season, it’s important to remember the consequences associated with tax fraud and tax evasion.  Today’s guilty plea demonstrates to Mr. O’Reilly and all other criminals that these types of offenses will not be tolerated.  IRS-CI appreciates the assistance of the United States Attorney for the Southern District of New York in helping to bring Mr. O’Reilly to justice.”

According to the allegations contained in the Information to which O’REILLY pled guilty and statements made in court:       

In or about 1989, O’REILLY was admitted to practice law in New York State.  At all relevant times, O’REILLY was a self-employed attorney who maintained a law practice in Putnam County, New York (the “O’Reilly Law Practice”).  The O’Reilly Law Practice specialized in, among other things, bankruptcy, foreclosure defense, and criminal defense.

O’REILLY operated the O’Reilly Law Practice as a sole proprietorship.  In the calendar year 2015, O’REILLY had between approximately three and eight paid employees.  As the owner and operator of the O’Reilly Law Practice, O’REILLY exercised control over the O’Reilly Law Practice’s financial affairs and was a responsible person under federal law for collecting, truthfully accounting for, and paying over payroll taxes to the Internal Revenue Service (“IRS”). 

During the calendar year 2015, O’REILLY withheld payroll taxes from the salaries of some employees of the O’Reilly Law Practice and filed Forms 941, Employer’s Quarterly Federal Tax Returns, reporting substantial amounts of payroll taxes due and owing to the IRS.  However, O’REILLY failed to pay over the payroll taxes for employees of the O’Reilly Law Practice to the IRS as required by law.  Instead, O’REILLY spent the withheld payroll taxes, which O’REILLY was required to hold in trust for the United States Government, on personal and business expenses.

O’REILLY’s failure to pay over payroll taxes for 2015 was part of a long-running course of conduct.  Between 1997 and 2018, O’REILLY failed to pay over a total of approximately $155,771 in payroll taxes, resulting in a liability of approximately $232,283 after interest and penalties.

In addition to failing to pay over payroll taxes to the IRS, O’REILLY also committed personal tax evasion.  During the calendar year 2015, O’REILLY withdrew approximately $119,427 from his attorney trust account at KeyBank (the “Attorney Trust Account”) for personal use.  O’REILLY did not report the income he realized from the Attorney Trust Account on his 2015 Form 1040, United States Individual Income Tax Return, which O’REILLY prepared and filed with the IRS in or about April 2016.  Instead, O’REILLY’s 2015 Form 1040 declared only approximately $58,223 in business income and a corresponding tax liability in the approximate amount of $14,403, which O’REILLY did not pay. 

O’REILLY’s conduct with respect to his personal income taxes in 2015 was also part of a long-running tax evasion scheme.  During the calendar years 2013 through 2017, O’REILLY withdrew a total of approximately $481,673 from his Attorney Trust Account for personal use.  O’REILLY did not pay taxes on this income and did not report it on his federal individual tax returns.  In addition, O’REILLY failed to pay most of the taxes that O’REILLY reported on his tax returns for the calendar years 2007 through 2015 and 2018.  In total, in the calendar years 2007 through 2018, O’REILLY evaded the payment of approximately $566,027 in personal federal income taxes, including interest and penalties.

In or about late 2016, in an effort to settle his outstanding tax liabilities, including his personal tax liabilities for the calendar years 2002 through 2015 and payroll tax liabilities for the period 2006 through 2015, O’REILLY submitted an offer in compromise to the IRS proposing to settle at least approximately $691,561 in outstanding tax liabilities for merely $12,400.  In the 2016 offer in compromise, which O’REILLY signed under penalty of perjury, O’REILLY made several material misstatements and omissions regarding his income and assets.  Among other things, O’REILLY’s offer in compromise: (a) failed to disclose the existence of O’REILLY’s Attorney Trust Account, from which, as described above, O’REILLY drew substantial income; (b) failed to disclose real property and land that O’REILLY owned in Socorro County, New Mexico; and (c) failed to disclose a 2010 Lincoln vehicle that O’REILLY had recently purchased for approximately $16,000.

*                *                *

O’REILLY, 61, of Danbury, Connecticut, pled guilty to one count of failing to pay over payroll taxes and one count of tax evasion for the calendar year 2015, each of which carries a maximum sentence of five years in prison.  As part of the plea agreement, O’REILLY has agreed to pay restitution to the IRS in the amount of at least $801,969.  Sentencing is scheduled for April 22, 2020, at 2:00 p.m., before U.S. District Judge Kenneth M. Karas.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding work of IRS Criminal Investigation in this case.

This case is being prosecuted by the Office’s White Plains Division. Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Jonathan D. Larsen, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today FRANCIS J. O’REILLY, a Carmel attorney, pled guilty to failure to pay over payroll taxes and tax evasion for the calendar year 2015.  O’REILLY pled guilty before U.S. Magistrate Judge Lisa Margaret Smith. 

U.S. Attorney Geoffrey S. Berman said:  “Francis O’Reilly is an attorney who has been in practice for three decades.  He certainly ought to know his obligations under the law at least as well as any non-lawyer.  And yet, today he admitted that he failed to pay over payroll taxes for years, and failed to report personal income and pay taxes due on that for years as well.  Now O’Reilly awaits sentencing for his crimes.”

IRS-CI Special Agent-in-Charge Jonathan D. Larsen said:  “Francis O’Reilly spent over two decades trying to evade his personal and business tax obligations using a multitude of schemes.  Not only did Mr. O’Reilly evade his own personal tax obligations, but he also stole payroll taxes collected from his own employees.  It is ironic that Mr. O’Reilly specialized in criminal defense, as his actions in this case are wholly criminal.  As we enter the beginning of the tax filing season, it’s important to remember the consequences associated with tax fraud and tax evasion.  Today’s guilty plea demonstrates to Mr. O’Reilly and all other criminals that these types of offenses will not be tolerated.  IRS-CI appreciates the assistance of the United States Attorney for the Southern District of New York in helping to bring Mr. O’Reilly to justice.”

According to the allegations contained in the Information to which O’REILLY pled guilty and statements made in court:       

In or about 1989, O’REILLY was admitted to practice law in New York State.  At all relevant times, O’REILLY was a self-employed attorney who maintained a law practice in Putnam County, New York (the “O’Reilly Law Practice”).  The O’Reilly Law Practice specialized in, among other things, bankruptcy, foreclosure defense, and criminal defense.

O’REILLY operated the O’Reilly Law Practice as a sole proprietorship.  In the calendar year 2015, O’REILLY had between approximately three and eight paid employees.  As the owner and operator of the O’Reilly Law Practice, O’REILLY exercised control over the O’Reilly Law Practice’s financial affairs and was a responsible person under federal law for collecting, truthfully accounting for, and paying over payroll taxes to the Internal Revenue Service (“IRS”). 

During the calendar year 2015, O’REILLY withheld payroll taxes from the salaries of some employees of the O’Reilly Law Practice and filed Forms 941, Employer’s Quarterly Federal Tax Returns, reporting substantial amounts of payroll taxes due and owing to the IRS.  However, O’REILLY failed to pay over the payroll taxes for employees of the O’Reilly Law Practice to the IRS as required by law.  Instead, O’REILLY spent the withheld payroll taxes, which O’REILLY was required to hold in trust for the United States Government, on personal and business expenses.

O’REILLY’s failure to pay over payroll taxes for 2015 was part of a long-running course of conduct.  Between 1997 and 2018, O’REILLY failed to pay over a total of approximately $155,771 in payroll taxes, resulting in a liability of approximately $232,283 after interest and penalties.

In addition to failing to pay over payroll taxes to the IRS, O’REILLY also committed personal tax evasion.  During the calendar year 2015, O’REILLY withdrew approximately $119,427 from his attorney trust account at KeyBank (the “Attorney Trust Account”) for personal use.  O’REILLY did not report the income he realized from the Attorney Trust Account on his 2015 Form 1040, United States Individual Income Tax Return, which O’REILLY prepared and filed with the IRS in or about April 2016.  Instead, O’REILLY’s 2015 Form 1040 declared only approximately $58,223 in business income and a corresponding tax liability in the approximate amount of $14,403, which O’REILLY did not pay. 

O’REILLY’s conduct with respect to his personal income taxes in 2015 was also part of a long-running tax evasion scheme.  During the calendar years 2013 through 2017, O’REILLY withdrew a total of approximately $481,673 from his Attorney Trust Account for personal use.  O’REILLY did not pay taxes on this income and did not report it on his federal individual tax returns.  In addition, O’REILLY failed to pay most of the taxes that O’REILLY reported on his tax returns for the calendar years 2007 through 2015 and 2018.  In total, in the calendar years 2007 through 2018, O’REILLY evaded the payment of approximately $566,027 in personal federal income taxes, including interest and penalties.

In or about late 2016, in an effort to settle his outstanding tax liabilities, including his personal tax liabilities for the calendar years 2002 through 2015 and payroll tax liabilities for the period 2006 through 2015, O’REILLY submitted an offer in compromise to the IRS proposing to settle at least approximately $691,561 in outstanding tax liabilities for merely $12,400.  In the 2016 offer in compromise, which O’REILLY signed under penalty of perjury, O’REILLY made several material misstatements and omissions regarding his income and assets.  Among other things, O’REILLY’s offer in compromise: (a) failed to disclose the existence of O’REILLY’s Attorney Trust Account, from which, as described above, O’REILLY drew substantial income; (b) failed to disclose real property and land that O’REILLY owned in Socorro County, New Mexico; and (c) failed to disclose a 2010 Lincoln vehicle that O’REILLY had recently purchased for approximately $16,000.

*                *                *

O’REILLY, 61, of Danbury, Connecticut, pled guilty to one count of failing to pay over payroll taxes and one count of tax evasion for the calendar year 2015, each of which carries a maximum sentence of five years in prison.  As part of the plea agreement, O’REILLY has agreed to pay restitution to the IRS in the amount of at least $801,969.  Sentencing is scheduled for April 22, 2020, at 2:00 p.m., before U.S. District Judge Kenneth M. Karas.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding work of IRS Criminal Investigation in this case.