The Division of Criminal Justice Corruption Bureau obtained a state grand jury indictment on Friday, Sept. 30, charging Richard Yanuzzi, 52, of Belleville, N.J., and his company, Sparroween, LLC. Yanuzzi and Sparroween were indicted on second-degree charges of theft by unlawful taking and misapplication of entrusted property. Yanuzzi also was charged with a second-degree count of misconduct by a corporate official. In addition, Yanuzzi and Sparroween were charged with multiple third-degree counts of failure to file tax returns, failure to pay taxes and filing false returns. The charges are the result of a joint investigation by the Division of Taxation Office of Criminal Investigation (OCI) and the New Jersey State Police Official Corruption North Squad.
Yanuzzi is the owner of Sparroween, LLC, which operates two cigar shops in Lyndhurst and West Caldwell, N.J., doing business at each location under the name Cigar Emporium. An examination of Yanuzzi’s bank accounts by OCI revealed that from 2012 to 2016, Yanuzzi allegedly failed to report and pay approximately $442,000 in sales and tobacco products taxes for his businesses, while also failing to file any state income tax returns or pay any state income taxes for himself during the same period. An examination of Yanuzzi’s business bank account deposits between 2012 and 2015 allegedly revealed nearly a $1.7 million shortfall in reported sales. This resulted in a loss of approximately $115,000 in unremitted sales tax owed to the state. The investigation also revealed that Yanuzzi and Sparroween filed no sales tax returns from the third quarter of 2014 to the first quarter of 2016 and allegedly filed false sales tax returns for the first quarter of 2012, the third quarter of 2013, and the second quarter of 2014, all of which under-reported sales.
The investigation further revealed that Yanuzzi and Sparroween allegedly filed no tobacco products tax returns from June 2015 to March 2016, and filed false tobacco products tax returns from February 2012 to May 2015, resulting in a failure to pay approximately $327,000 in taxes owed to the state. Yanuzzi allegedly never registered the second cigar shop he opened in West Caldwell with the Division of Taxation, as required by law. For that alleged omission, he is charged with a fourth-degree count of engaging in conduct requiring licensure or registration without licensure or registration.
“Those who evade taxes, as Yanuzzi is alleged to have done, steal from the state and its honest taxpayers,” said Attorney General Porrino. “We’ll aggressively prosecute this criminal conduct, which is an affront to the business owners and taxpayers of New Jersey who are paying their fair share.”
“By charging alleged tax evaders like Yanuzzi, we send a message that tax evasion is a serious crime that deprives our state and its law-abiding taxpayers of needed revenue,” said Director Elie Honig of the Division of Criminal Justice. “We’ll continue to pursue these offenders in partnership with Treasury’s Office of Criminal Investigation and the State Police.”
“The Division of Taxation strives to increase voluntary compliance with tax laws through a combination of taxpayer education and assistance, and strong compliance and enforcement efforts,” said John Ficara, Acting Director of the Division of Taxation. “It is important to demonstrate to the honest taxpayers of New Jersey that we are doing everything possible to ensure compliance from those who attempt to evade their obligations. The Division’s Office of Criminal Investigation continuously partners with fellow law enforcement agencies to protect honest taxpayers from criminal business activities that not only steal from the State but from consumers as well.”
The case was presented to the state grand jury by Deputy Attorney General Anthony J. Robinson of the Division of Criminal Justice Corruption Bureau. Attorney General Porrino commended the forensic auditors in the Division of Taxation Office of Criminal Investigation and the detectives in the New Jersey State Police Official Corruption North Squad for their joint investigation. The case was investigated for the Division of Taxation Office of Criminal Investigation by Criminal Forensic Auditor Kevin Curry and Supervising Forensic Auditor Debra Lewaine.
Second-degree crimes carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree crimes carry a sentence of three to five years in prison and fine of up to $15,000. Fourth-degree crimes carry a sentence of up to 18 months in prison and a fine of up to $10,000. The indictment is merely an accusation and the defendant is presumed innocent until proven guilty.
The indictment was handed up to Superior Court Judge Mary C. Jacobson in Mercer County, who assigned the case to Mercer County, where the defendant will be ordered to appear in court at a later date for arraignment.
The Division of Taxation Office of Criminal Investigation maintains a 24-hour TIP Line for citizens to report criminal activity related to tax evasion at (609) 588-5001.
In addition, Attorney General Porrino and Director Honig noted that the Division of Criminal Justice has a toll-free tip line 1-866-TIPS-4CJ for the public to report corruption, financial crimes and other illegal activities confidentially. The public can also log on to the Division webpage at www.njdcj.org to report suspected wrongdoing confidentially.
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