Wallingford Business Owner Cheated IRS: Feds

Wallingford CT

20 August, 2020

9:52 AM

Description

WALLINGFORD, CT — A Meriden man has been sentenced to a year and a day in prison and will pay restitution of more than $1 million on charges that he obstructed the IRS, according to a statement from federal prosecutors. Donald Cariati, Jr., 45, will also serve one year of supervised release and pay a $95,000 fine. Cariati is the owner of Cariati Developers Inc., a snowplow and hauling business based in Wallingford. Prosecutors said that between 2013 and 2017, Cariati paid several employees with company checks asserting that they were independent contractors or subcontractors to evade the responsibility to withhold and pay over taxes to the IRS. However, Cariati failed to issue Forms 1099 to these "subcontractors" for particular years. Cariati also informed some workers that they were being paid off the books, meaning that their pay was not reported to the IRS. In late 2015, the IRS began an audit of CDI. During the course of this audit, Cariati caused fraudulent invoices to be made available to an IRS revenue agent. The invoices were purported to have been created in 2013 and purported to substantiate that individuals were appropriately considered subcontractors. The investigation also revealed that, in 2014, CDI paid an invoice related to products for Cariati's cigarette boat. During the IRS audit, Cariati caused his accountant to provide to the IRS a false invoice to make it appear that the purchase was a business expense and not a personal expense. The court ordered Cariati to pay restitution of $1,077,048.99. Cariati paid $1 million toward his tax obligation today. On Feb. 28, Cariati pleaded guilty to one count of obstructing or impeding the due administration of the Internal Revenue laws. Cariati, who is released on bond, is required to report to prison in 90 days.