News from New York State Department of Taxation and Finance

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Car Dealer’s Tax Fraud Scheme Runs Out of Gas

Dealer Underreported Taxable Sales and Failed to Pay More Than $42,000 In Taxes

ALBANY, NY (10/25/2007; 1650)(readMedia)-- Acting New York State Commissioner of Taxation and Finance Barbara G. Billet today announced the arrest of a Long Island car dealer on charges of tax fraud stemming from an investigation initiated by Suffolk County District Attorney Thomas J. Spota.

Salvatore Cioffi, 66, of 404 Landing Avenue, Smithtown, New York is the owner of Automart of LI Inc. located in Patchogue, a New York State Corporation engaged in the wholesale and retail sale of used automobiles. Mr. Cioffi was investigated for alleged underreporting of taxable sales and failure to remit sales tax collections. The Suffolk DA’s office obtained MV-50 books for Automart of LI Inc. from the New York State Department of Motor Vehicles. MV-50 books contain Retail Certificate of Sale forms completed by New York State car dealers when an automobile is sold and specifically state that the dealer has certified that all New York State and local taxes resulting from the sale have been collected from the purchaser. From the Tax Department’s review of the MV-50 Books, it was determined that Automart of LI Inc. substantially underreported its taxable sales by approximately $400,000 and failed to remit sales tax of more than $42,000 owed to the New York State Department of Taxation and Finance.

Mr. Cioffi was arrested on a charge of Grand Larceny in the 3rd degree and appeared before Judge Liou in Suffolk County Court on October 18, 2007 at which time he entered a plea of not guilty. If convicted of the offense charged at the arraignment, Mr. Cioffi faces the possibility of serving up to seven years in state prison. Mr. Cioffi’s case is being prosecuted by Assistant District Attorney Joe Conley of the Suffolk County District Attorney’s office.

Acting Commissioner Billet said, “Since July, five car dealers across the state have faced criminal charges for underreporting their car sales and for stealing the sales tax dollars they collected in connection with those sales. In each of these cases Department auditors found discrepancies between sales information reported by the dealers to the Department of Motor Vehicles and to the Tax Department. In ongoing investigations across the state, the Department is continuing to compare DMV records with the sales tax returns filed by automobile dealers. Dealers who know that such a review will reveal discrepancies are urged to immediately file amended tax returns declaring the correct amount of sales. Such voluntary self-disclosure will be viewed as an important factor by the Department in determining how to proceed with respect to the dealer. The Department thanks District Attorney Spota for his vigorous prosecution of tax crimes and his continued support in our mission of ensuring the fairest and most effective tax system in the nation.”