New Rochelle Man Sentenced to 37 Months for Social Security Benefits Fraud and Tax Evasion

James Pavlounis, 62, of New Rochelle, New York, was sentenced to 37 months in prison for perpetrating a 12-year scheme to defraud the Social Security Administration and obtain disability benefits to which he was not entitled, and causing his valet parking service business to evade paying corporate income taxes for five years.

According to the indictment and statements made in public court proceedings and filings, Pavlounis obtained approximately $646,370 in Social Security benefits by providing false information to the Social Security Administration from January 2013 through March 2025. He claimed he was too disabled to support himself and failed to disclose he was receiving hundreds of thousands of dollars from the operation of valet parking service businesses.

Further, from January 2018 through December 2022, Pavlounis evaded the collection of taxes of Select Parking Systems Inc. (“SPS”), one of the valet parking service businesses, due for the years 2017 through 2021, by making it appear that he was not operating SPS, concealing the income he was earning from SPS from the Internal Revenue Service (“IRS”), and making it appear that SPS was not profitable. Through this scheme, Pavlounis caused SPS to evade payment of approximately $248,810 in taxes.

PAVLOUNIS perpetrated the scheme by, among other things: having a family member named as the owner of SPS; paying for his personal expenses using money from SPS’s business bank account; failing to inform SPS’s tax return preparer (the “Preparer”) that he was paying his personal expenses using money from SPS’s bank account; not filing his own individual income tax returns with the IRS, thereby not reporting any individual income; providing ledgers to the Preparer and representing that they contained SPS’s expenses for renting parking lots when there were no such expenses (the “False Ledgers”); causing the Preparer to falsely report on SPS’s corporate income tax returns that SPS paid a total of $1,054,204 in expenses for renting parking lots over the years 2017 through 2021; falsely representing, during a meeting with IRS Special Agents that all the information contained on SPS’s tax returns for 2017 through 2021 was true and correct and that reported rental expenses were amounts expended to rent parking lots where SPS valets parked cars for valet customers; and, producing the False Ledgers in response to a grand jury subpoena.

In addition to the prison term, Pavlounis was sentenced to three years of supervised release and ordered to pay restitution of approximately $895,180 and forfeiture of approximately $646,370.

U.S. Attorney Jay Clayton praised the outstanding investigative work of the Social Security Administration Office of Inspector General and the Internal Revenue Service-Criminal Investigation.

This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Margery Feinzig is in charge of the prosecution.

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