Used Car Salesman Pleads Guilty To Tax Charge

• by New York State Department of Taxation and Finance

ALBANY, NY (01/07/2009)(readMedia)-- New York State Department of Taxation and Finance Commissioner Robert L. Megna today announced that a Hamburg, N.Y., used car salesman pled guilty to a felony tax charge for collecting and failing to remit to the state over $100,000 in sales taxes he collected from customers during a two-year period.

Ronald L. Henry, 52, who does business as R&H Auto Sales, 5873 Camp Road, Hamburg, pled guilty to Grand Larceny in the Third Degree, a class D felony, before the Hon. Thomas P. Franczyk in Erie County Court.

Henry is alleged to have stolen $101,836.86 in sales tax revenue by repeatedly filing sales tax returns which significantly underreported the gross sales of R&H Auto Sales and sales tax it collected between March 1, 2005 and February 28, 2007.

An examination of the business records by Tax Department auditors revealed that Henry collected over $123,000 of sales tax during this period but only remitted $21,402.32 to the state, while he was underreporting the business's gross sales by over $1 million.

Commissioner Megna said, "Sales taxes collected by a business is never the property of the vendor, but is held in trust for the State. Conversion of those funds by a business for its own use is a larceny. The intentional underreporting of sales tax collected and remitted has substantially contributed to the tax gap we are facing in New York. Our Special Investigations Unit (SIU) is working across the state with local district attorneys to expose and prosecute those who engage in tax fraud."

Henry was released on his own recognizance. Sentencing is scheduled for May 18, 2009. A class D felony carries with it a maximum penalty of seven years in state prison.

This case was investigated by auditors and investigators from the Buffalo District Office and the Special Investigations Unit of the New York State Department of Taxation and Finance, in conjunction with the Erie County District Attorney's Office. Commissioner Megna thanked Erie County District Attorney Frank Sedita for his prosecution of this case.

###