24 September 2009 –
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that DENNIS PILOTTI, a
Certified Public Accountant (“CPA”), was sentenced today in White
Plains federal court to 3 years in prison for evading his income
taxes for the years 2001 through 2004 and making false statements
to Merrill Lynch Business Financial Services, Inc. (“Merrill
Lynch”) in connection with a $5.1 million loan.
According to Court records and his guilty plea, PILOTTI
owned and operated Pilotti, Cunzio and Associates, LLP and its
successor firm, Pilotti and Company, which were CPA firms located
in Valhalla and Armonk, New York (“the accounting firms”).
PILOTTI engaged in a scheme to evade his income taxes in
connection with his operation of the accounting firms and a health
club owned by his wife and son by: (1) falsely classifying business
receipts to the accounting firms as loans and falsely inflating his
capital accounts to offset the payment of his personal expenses by
the firm; (2) setting up two shell companies that had no business
purpose, into which he diverted business receipts from the
accounting firms and then used the money to pay personal expenses;
(3) diverting money from the corporate entities that owned and
operated the health club to the accounting firms and the shell
companies, and thereafter failing to report that money as income;
and (4) filing false corporate, partnership, and individual tax
returns with the Internal Revenue Service.
As a result of his tax evasion scheme, PILOTTI
understated his taxable income by more than $1,226,284 in total,
and understated his tax liability by approximately $365,000 for the
years 2001 through 2004.
PILOTTI also plead guilty to making false statements on a
loan application for a $5.1 million loan made by Merrill Lynch
Business Financial Services, Inc., a wholly owned subsidiary of
Merrill Lynch Bank, USA, to PILOTTI’S wife and son. PILOTTI’s wife
and son owned two corporations, which in turn owned and operated
the now defunct Peak Health Club located on Long Island. PILOTTI
created and submitted numerous false documents to Merrill Lynch in
connection with the loan application submitted to Merrill Lynch,
including tax returns he prepared for his wife, son, and the
corporations that owned the health club, all of which falsely and
fraudulently overstated their income.
PILOTTI, age 56, was directed by United States District
Judge STEPHEN C. ROBINSON to begin serving his sentence on January
11, 2010, and was ordered to pay $318,000 in restitution.
Mr. BHARARA praised the investigative work of the Internal
Revenue Service, Criminal Investigation Division, and the Federal
Bureau of Investigation and thanked them for their assistance in
Assistant United States Attorneys STANLEY J. OKULA, JR.
and PERRY CARBONE are in charge of the prosecution.