United States Attorney
Southern District of New York
U.S. ATTORNEY’S OFFICE
NOVEMBER 29, 2010 ELLEN DAVIS,
PREET BHARARA, the United States Attorney for the
Southern District of New York, and CHARLES R. PINE, the Special
Agent-in-Charge of the New York Field Office of the Internal
Revenue Service, Criminal Investigation Division (“IRS-CID”),
announced that GARRY MULLAHY, a former co-owner of A+ RESTORATION
CONSULTANTS CORP. (“A+”), was sentenced last week to two years in
prison for his role in a conspiracy to file false tax returns and
structure cash transactions to evade Department of Treasury
reporting requirements. He was also ordered to pay restitution
of more than $985,000 to the IRS. The sentence was imposed by
U.S. District Judge WILLIAM H. PAULEY III.
According to the Information to which GARRY MULLAHY
pled and statements made during GARRY MULLAHY’s guilty plea and
sentencing proceedings:
GARRY MULLAHY and his brother, THOMAS MULLAHY, owned
and operated A+, a Queens-based cement and masonry contractor
that operated in the New York City area. Between 2004 and 2007,
GARRY and THOMAS MULLAHY engaged in a scheme to generate cash
derived from customers of A+ in such a way that the receipt of
this revenue was concealed from A+’s accountants and, ultimately,
omitted from the corporate income tax returns filed on behalf of
the company. The brothers used a portion of the cash generated
to pay employees of A+ in cash so they were not subject to
withholding tax. In doing so, GARRY and THOMAS MULLAHY evaded
the payment of payroll taxes and filed, and caused the filing of,
false payroll tax returns. The scheme also involved generating
fraudulent business expenses, which, in fact, had not been
incurred by A+, so as to reduce A+’s taxable income.
To execute this scheme, GARRY and THOMAS MULLAHY
maintained bank accounts that they concealed from their
accountants. Accordingly, the activities in these accounts were
not reflected on the corporate income tax returns of A+. They
also illegally structured cash transactions from the accounts
they had concealed, by withdrawing cash or cashing checks in
amounts equal to or less than $10,000, in order to evade the
filing of Currency Transaction Reports with the Department of the
Treasury. Finally, GARRY and THOMAS MULLAHY wrote checks from A+
to purported subcontractors that did not, in fact, represent
legitimate payments to the subcontractors of expenses, but
instead were simply cashed as part of the conspiracy. A+ ceased
to do business in approximately late 2007.
During the sentencing proceeding, Judge PAULEY
commented that this was not the first such case involving
contractors that the Court had seen in its years on the bench,
such that “there is a need for deterrence.” GARRY MULLAHY had
emigrated to the United States from Ireland and, in imposing
sentence, Judge PAULEY stated that GARRY MULLAHY “made a very
comfortable life here in America.” Judge PAULEY further stated
that “[w]e welcomed you and gave you all the benefits equivalent
to citizenship and you betrayed that trust. You took advantage
of it.”
THOMAS MULLAHY pled guilty for his role in the
conspiracy before U.S. District Judge LAURA TAYLOR SWAIN on
October 29, 2010. THOMAS MULLAHY is scheduled to be sentenced on
February 3, 2011, at 12:30 p.m. The charge to which THOMAS
MULLAHY pled guilty carries a maximum sentence of 5 years in
prison and a maximum term of 3 years of supervised release.
THOMAS MULLAHY, age 41, resides in Middle Village, New
York. GARRY MULLAHY, age 43, resides in Irvington, New York.
Mr. BHARARA thanked the IRS-CID, which investigated the
case, and the U.S. Department of Labor, Office of the Inspector
General, which assisted in the investigation.
The case is being handled by the Office’s Complex
Frauds Unit. Assistant U.S. Attorney DANIEL W. LEVY is in charge
of the prosecution.
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