Metro Area Business Owner Of Steel Supply Company Pleads Guilty To Felony Charge In Sales Tax Fraud Case

ALBANY, NY (02/05/2010)(readMedia)-- New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward announced today that Joseph Anza, Sr., one of the principal owners of a leading steel service center covering New York City and the tri-state area, pled guilty February 2 to failing to collect nearly $900,000 in state sales tax and failing to remit the money to New York State between December 1998 through August 2004.

As part of the plea agreement to the charge of Failure to Collect and Remit Sales Tax, a class E felony, Anza and all principal owners of National Steel Supply, Inc., agreed to pay back $895,704.59 in state sales tax, along with $2,483,720.16 in interest and penalties, for a total of $3,379,424.75.

National Steel Supply, Inc., located at 700 Havemeyer Ave., Bronx, with three other distribution facilities located in Queens, Brooklyn, and Newark, New Jersey, sells unfinished steel products, such as steel girders and steel fences, to various small businesses and construction companies.

Anza, 80, a resident of Fort Lauderdale, Florida, pled guilty to the felony charge before Acting Supreme Court Judge Dorothy Chin-Brandt and is scheduled to be sentenced April 13. Anza will receive a conditional discharge.

The agreement also stipulated that Anza, all principals of National Steel Supply, Inc., which include Vincent Anza, Sr., his son, and Dorita Anza, Vincent's wife, who is not a principal, would pay the Tax Department $436,904.00 in unpaid personal income taxes, withholding taxes, corporate franchise taxes and interest and penalties. Over $1 million has been paid to the Tax Department to satisfy this liability and part of the sales tax debt.

According to the agreement, the total amount of all unpaid tax liability owed to New York State, including penalties and interest, is $3,816,328.75. The balance must be paid back over a five-year period based on a scheduled payment plan.

In order to secure this tax debt, Anza, his son, Vincent, and the defendant's adult grandchildren agreed to mortgage their real estate in New York, New Jersey, Connecticut, Florida, and Puerto Rico to the Tax Department. This consent allowed the Tax Department to enter judgments against the parties in multiple jurisdictions. If the parties fail to abide by the terms of their payment arrangement or fail to pay their taxes in the future, the Tax Department would have the option of foreclosing on their mortgages, seizing the assets of the defendant and National Steel Supply, Inc. and revoking the company's license to act as a vendor in New York State.

This case arose from a complaint over six years ago by rival steel supply company, Ideal Steel Supply Corp., owned by the Anza's cousins. Ideal Steel Supply Corp. sued National Steel Supply, Inc. under the Racketeer Influenced and Corrupt Organizations Act (RICO) claiming that their failure to collect sales tax was intended to harm their business. In 2006, the U.S. Supreme Court decided Anza vs. Ideal Steel Supply Corp., in which the Court ruled that National Steel Supply Inc.'s actions did not fall under RICO, and noted that, "[t]he direct victim of [National Steel Supply Inc.'s] conduct was the State of New York, not Ideal. It was the State that was being defrauded and the State that lost tax revenue as a result."

Acting Commissioner Woodward said, "Tax scofflaws create an uneven playing field which leads to all New Yorkers paying more of the tax burden, taxes that pay for essential services such as health care, education and transportation. The Tax Department is committed to pursuing all tax cheats so that every New Yorker pays his or her fair share.

"I commend Queens County District Attorney Richard A. Brown and his staff for their aggressive prosecution of this case.

"The Department offers the Voluntary Disclosure and Compliance Program to encourage delinquent taxpayers to become compliant without facing criminal prosecution or civil penalty. For more information about these programs, go to the Department's website at www.nystax.gov."

The audit and investigation of National Steel Supply, Inc. was conducted by staff from the Queens District Office, staff from the Queens Special Investigations Unit and Robert B. Eisman, Attorney in Charge of the Manhattan Special Investigations Unit.

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