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Massachusetts Man Pleads Guilty to Tax Evasion
A Massachusetts man has pleaded guilty to tax evasion, admitting to concealing nearly $600,000 in income from the Internal Revenue Service (IRS), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Peter F. Neronha for the District of Rhode Island and Acting Assistant Attorney General John A. DiCicco of the Tax Division.
Gerald Diodati, 61, of Seekonk, Mass., pleaded guilty yesterday before Chief U.S. District Judge Mary M. Lisi to one count of tax evasion. According to court documents, from approximately 2003 through 2006, Diodati concealed from the IRS at least $586,000 he earned through his construction business by converting the proceeds of his businesses to cash and utilizing check cashing services for the purpose of evading assessment of income tax.
For each year of the scheme, false income tax returns were prepared and filed, concealing additional taxes Diodati rightfully owed. In all, from 2003 through 2006, Diodati attempted to evade the assessment of more than $194,000 in federal income taxes.
The case originated from an undercover investigation initiated by the FBI’s Providence, R.I., Field Office. As part of the investigation, 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.
In 2003, Hemphill Construction was awarded a subcontract after signing a collective bargaining agreement with the Rhode Island Laborers District Council on behalf of 3 local unions, to perform demolition work at the Rising Sun Mills rehabilitation project in Providence. Hemphill, in turn, subcontracted the work to Diodati through RI Demolition Inc., a company Diodati formed for this purpose.
At sentencing, scheduled for February 10, 2011, Diodati faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release following his prison term. Diodati has agreed to pay restitution in the amount of $194,031. The case is being 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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Key Facts
- State: Massachusetts
- Category: White Collar Crime|Organized Crime
- Source: DOJ Press Release ↗
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