Buffalo Business Owner Sentenced To Five Years Probation For Stealing Sales Tax

ALBANY, NY (02/18/2010)(readMedia)-- New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward today announced that David C. Forness, owner of The Buffalo House, a shuttered restaurant on Franklin Street and Hemingway's, a Pearl Street restaurant he formerly owned in the City of Buffalo, was sentenced today by State Supreme Court Justice Russell P. Buscaglia to five years probation on felony larceny charges.

Forness, 71, of 501 Delaware Avenue, had entered a guilty plea on July 13, 2009 to Grand Larceny in the fourth degree, a class E felony, for failing to pay $50,671.04 in sales taxes he collected from his customers at the two restaurants between September 2004 and May 2007.

Forness made an initial payment of $10,000 when he pled guilty and today paid $40,671.04 during the Court proceeding, the total amount of sales tax stolen. Forness also signed an agreement with the Tax Department to repay $338,000 which represents his total outstanding liability, including interest and penalties. Forness agreed to make monthly payments of $4,800 beginning March 1, 2010.

The Buffalo House remains closed. Hemingway's was sold by Forness in 2008.

Acting Commissioner Woodward said, "This case is yet another prosecution arising out of our investigation of sales tax fraud by various cash businesses. Sales tax fraud not only deprives state and local governments of needed tax revenues, but it also defrauds customers who have paid the sales tax. I commend Erie County District Attorney Frank J. Sedita III and Assistant District Attorney Susan Sadinsky for their aggressive prosecution of these cases.

"The Department offers programs such as the Voluntary Disclosure and Compliance Program to encourage delinquent taxpayers to become compliant without facing criminal prosecution or civil penalty. It is hoped that this conviction and sentence will encourage other taxpayers to come forward and satisfy their tax obligation. For more information about these programs, go to the Department's website at www.nystax.gov."

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