In what an Internal Revenue Service criminal investigator called the biggest tax-evasion payment ever collected in the Rochester area, businessman John P. Gizzi has turned over $11.5 million to settle criminal and civil tax-related charges.
Feds seize $1.5 million from Gates businessman
Gizzi was not criminally charged in the scrap-metal scheme, which could have seen him sentenced to up to 10 years in prison.
On Tuesday, Gizzi signed a plea agreement admitting to two personal tax-evasion charges and one charge related to an S corporation he controlled and used to hide income.
As part of the plea deal, Gizzi turned over some $9 million to settle the criminal and civil tax-evasion charges, Assistant U.S. Attorney John Field told the court.
Gizzi is slated to be sentenced on the three criminal counts in November. He faces up to six years in prison. At sentencing Gizzi is also liable to pay a separate $500,000 fine.
The criminal charges to which he pled involved Gizzi’s hiding income and claiming losses on his personal federal tax returns, understating income for the S corporation of which he was the controlling shareholder and writing off the full cost of constructing a commercial structure in a single tax year instead of taking depreciation over several years as the tax code requires.
As previously reported by the Rochester Business Journal, Gizzi until recently headed two local companies that use extensive quantities of high-grade metal: Advantech Industries Inc., a Buffalo Road sheet metal fabrication and assembly firm; and Precise Tool & Manufacturing Inc., a maker of machined metal parts.
Gizzi, 64, resigned from both firms and tendered his shares. The companies, which partly rely on government contracts, had cooperated with the IRS and were concentrating on serving customers including the U.S. government, a lawyer representing the firms told the Rochester Business Journal last week.
Gizzi’s tax crimes were uncovered after a sharp-eyed IRS auditor noticed discrepancies in his tax forms and alerted the agency’s criminal division, IRS criminal investigator Timothy Shanahan said.
While Gizzi had cooperated with authorities, he did so only after it became clear that the feds had evidence sufficient to convict him, said William Hochul Jr., U.S. attorney for the Western District of New York.
Gizzi’s guilty plea proves that “it isn’t just the little people who pay taxes,” Hochul said.
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