Westchester CPAs Plead Guilty to $2M Tax Fraud

WHITE PLAINS, NY – In a brazen scheme to evade paying millions in taxes, two certified public accountants, GEORGE SANOSSIAN, 70, of Scarsdale, New York, and JACK N. SARDIS, 66, of Englewood Cliffs, New Jersey, have pleaded guilty to conspiracy to defraud the IRS. The defendants, partners in a Westchester accounting firm, cheated their clients out of millions in taxes by concealing income and evading payroll taxes.

According to the Informations, to which SARDIS and SANOSSIAN pled guilty, the duo agreed with clients to scheme to reduce their federal income and payroll tax liability. They advised clients to issue checks made payable to a shell company, which they then cashed at a check cashing service and returned the cash, minus a fee, to the clients. This scheme allowed the clients to evade paying millions in taxes, with a total of $2 million in checks being cashed.

The clients used the cash to pay employees without reporting the cash wages on their IRS Forms 941, thereby evading both their employer contributions to Social Security and Medicare and their obligation to withhold income tax on those wages. The owners and managers of some clients took the cash for personal use without reporting the income on their personal federal and state tax returns.

U.S. Attorney Damian Williams said, “As they admitted in court, the defendants conspired to fraudulently reduce the tax liability of clients of their accounting firm. This case serves as a reminder to all Americans that they are required to truthfully report their earnings and that criminal penalties could await those who fraudulently deceive the IRS.”

IRS-CI Special Agent in Charge Thomas M. Fattorusso added, “Schemes to conceal and reduce federal income and payroll tax liability, such as those utilized by Sardis and Sanossian, are unfair to every taxpayer who obeys the law and pays their fair share. The prosecution of individuals who intentionally conceal income and evade taxes is a key step in the IRS’s enforcement strategy.”

SARDIS and SANOSSIAN have agreed to pay restitution to the IRS and New York State, representing the additional tax due and owing as a result of their conduct, in the total amount of $652,883.60. The maximum potential sentence in these cases is five years in prison. Sentencing is scheduled for September 24 and 26, 2024, for SANOSSIAN and SARDIS, respectively.