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New York State Department of Taxation and Finance Commissioner Robert L. Megna today announced that a Manhattan hotel owner, Raziel Ofer, recently pleaded guilty to a charge of first degree grand larceny and admitted stealing $1,387,743 in sales taxes that he collected from customers but failed to remit to the state.
Ofer, 48, of 240 W. 73rd St., is the owner of an internet hotel business operating under the name of Global Hotels. Ofer provided short term stays in apartments and hotel rooms at various locations to travelers visiting Manhattan.
Ofer faces a maximum of eight-and-a-third to 25 years in prison if he fails to comply with his guilty plea agreement, which requires him to pay $1,887,743 in sales tax, accrued interest and penalties.
The Tax Department's investigation revealed that Ofer collected the sales taxes, which he reported between January 2006 and March 2008. He often made only nominal payments to the state or paid the state with checks that bounced.
Commissioner Megna said "This case illustrates the Department's resolve to hold accountable business operators who steal the sales taxes that they have collected from their customers. The Department is closely examining the thousands of businesses that repeatedly file sales tax returns without paying the sales taxes that they have, according to their own returns, collected from their customers. Many of these businesses illegally use the sales tax revenues that they collected to operate their business or to line their own pockets."
"Regardless of the reason, businesses that misappropriate the money they collected are cheating both their customers and state and local governments."
Megna said that the problem of misappropriated sales tax revenue is significant. In 2007, for example, vendors failed to timely pay approximately $172 million in sales tax revenues that they had, admittedly, collected from their customers. Many of these businesses are repeat offenders.
For more information on this case, please refer to the New York County District Attorney's press release, which can be found at: http://www.manhattanda.org/whatsnew/press/2008-07-17b.shtml.
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Last Modified: July 23, 2008
