Niagara County Businessman Pleads To Felony Charge In Sales Tax Fraud Case

• by New York State Department of Taxation and Finance

ALBANY, NY (12/18/2009)(readMedia)-- New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward today announced that a North Tonawanda entrepreneur with a film-making and tree-trimming business, pled guilty to stealing over $70,000 in state and local sales tax and failing to remit the money to New York State for a period of seven years.

William M. Cowell, president and owner of Captures Entertainment, Inc., doing business as Action Tree Service, located in North Tonawanda, pled guilty today before New York State Supreme Court Judge Richard C. Kloch, Sr. to Grand Larceny in the Fourth Degree, a class E felony. An additional charge of Criminal Possession of a Forged Instrument in the Second Degree was satisfied with Cowell's guilty plea to the grand larceny charge.

Cowell, 44, of 192 Witmer Road, North Tonawanda, is the founder and president of the Buffalo Niagara Film Festival.

A tax department investigation revealed that Captures Entertainment, Inc. was incorporated with New York State on April 16, 2002, but Cowell never registered the company to collect sales tax, as required by New York State Tax Code 1134. Cowell, however, collected sales tax from his customers which he failed to remit to the state from December 2000 through November 30, 2007.

Conversely, Cowell failed to collect sales tax on taxable tree trimming services, falsely completing Certificates of Capital Improvement, claiming that the services were non-taxable.

Cowell was released on his own recognizance and was ordered to make restitution to the Department of Taxation and Finance before his sentencing date.

Cowell is scheduled to appear before Judge Kloch on February 25, 2010 for sentencing and is expected to receive five years probation.

Acting Commissioner Woodward said, "While sales tax larceny prosecutions are sadly becoming commonplace, the repeated use of forged certificates of capital improvement to cover the failure to collect tax makes this case particularly egregious. The Tax Department is committed to working aggressively with prosecutors across the state to combat this type of sales tax fraud."

Acting Commissioner Woodward added: "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 arrests such as this one will encourage such 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."

This case was investigated by auditors and investigators from the Buffalo District Office, Buffalo Collections and Civil Enforcement Division and the Special Investigations Unit of the New York State Department of Taxation and Finance. Acting Commissioner Woodward thanked Niagara County District Attorney Michael J. Violante and Assistant District Attorney Brian Seaman for their prosecution of this case.

###