Gerald Diodati, Tax Evasion, Massachusetts 2010

Grimy Times has learned that a Massachusetts man has been sentenced to prison for tax evasion related to an FBI investigation of organized crime activity in Rhode Island.

Gerald Diodati, 61, of Seekonk, Mass., was sentenced to 12 months and one day in prison for tax evasion related to his 2003 income tax filings. U.S. District Court Chief Judge Mary M. Lisi also ordered Diodati to pay $194,031 in restitution and to serve three years of supervised release following his prison term.

Diodati pleaded guilty in November 2010 to tax evasion related to his 2003 income tax filings. The tax evasion was part of an organized crime investigation led by the FBI, which found that Diodati concealed from the IRS at least $586,000 he earned through his construction business.

According to court documents, from approximately 2003 through 2006, Diodati converted the proceeds of his businesses to cash and used check cashing services to evade assessment of income tax. He also attempted to evade the assessment of more than $194,000 in federal income taxes.

The FBI established an undercover company, Hemphill Construction, which sought the award of union construction contracts. Diodati began working as a consultant to Hemphill Construction in 2002, operating his own businesses out of the construction company’s office in Johnston, R.I.

The case was prosecuted by Trial Attorney Scott Lawson of the Criminal Division’s Organized Crime and Racketeering Section and Trial Attorney Jessica Nuzzellilo of the Tax Division.

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