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Federal officials have seized $1.5 million from a Gates businessman accused of hiding nearly $2 million from the Internal Revenue Service.
Federal prosecutors filed papers July 2 in U.S. District Court here detailing the government's case for taking the $1.5 million from John P. Gizzi.
Gizzi stands accused of stashing $1.9 million in cash around his home as part of a scheme to avoid paying taxes on the apparently legally gotten gain. Gizzi earned the money selling scrap metal over a five-year period ending in 2010, the filing states.
While so-called scrappers' illicit sales of stolen metal have been a problem tracked by law enforcement agencies for several years, the forfeiture complaint does not allege that Gizzi obtained the metal illegally or identify the source of the roughly $400,000 a year worth of scrap he sold over the five-year period.
Public records connect Gizzi to two area manufacturing firms, both of which use quantities of high-grade metal.
A 2002 registration in the New York secretary of state's corporation database identifies Gizzi as the chief executive officer of Advantech Industries Inc., a Buffalo Road sheet metal fabrication and assembly firm.
A financing statement filed with the Monroe County clerk's office that details a 1998 loan to Precise Tool & Manufacturing Inc. identifies John P. Gizzi as president of the firm, a maker of machined metal parts.
An attorney representing Advantech and Precise Manufacturing responded to a reporter's emailed queries to Advantech president James Gizzi and Precise Manufacturing president John S. Gizzi with separate emails worded virtually identically.
John P. Gizzi had resigned as CEO and tendered his shares in Advantech in September of last year and similarly resigned his position with Precise Manufacturing and gave up his stake in the company in April of this year, wrote Dan O'Brien of Woods Oviatt Gillman LLP.
Neither firm was charged with any criminal offense or is under investigation. Both cooperated fully with the IRS and are focusing on their business, employees and customers, including the U.S. Department of Defense, the attorney added.
John P. Gizzi avoided informing the IRS of income from scrap metal sales, neglecting to file forms that businesses are supposed to use to report cash transactions of $10,000 or more, the forfeiture action alleges.
Gizzi "concealed revenue earned from the sales of scrap metal from his accountants and tax preparer (and) in order to hide the scrap sale revenue ... took the cash and stored it at his house in safes," the filing states.
Dealers that bought the scrap metal from Gizzi are not identified in the forfeiture papers.
While Gizzi is named in the forfeiture action, he is not its target. The filing mentions Gizzi by name but targets only the cash, naming $1.5 million in U.S. currency as its sole defendant.
It is not clear what penalties Gizzi might face other than having to turn over most of the money he allegedly received from surreptitious scrap metal sales and having to pay the government's court costs in the forfeiture case.
The forfeiture complaint states that Gizzi's relinquishment of the $1.5 million is part of a plea agreement related to tax charges. Specifically, the action alleges, Gizzi violated Title 31, Section 5324(b) of the U.S. Code. As of July 23, prosecutors had yet to file a criminal complaint against Gizzi.
Buffalo-based Justice Department spokeswoman Barbara Burns declined to elaborate on allegations made in the civil forfeiture complaint.
The federal code allows for persons convicted of committing violations named in the forfeiture action that are part of an illegal activity involving more than $100,000 in a 12-month period to be fined up to $500,000 and sentenced to prison terms of up to 10 years.
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