Owner of Boston Cab Charged with Tax and Fraud Offenses

[nitpicker]

https://www.justice.gov/usao-ma/pr/owner-boston-cab-charged-tax-and-fraud-offenses

Department of Justice
U.S. Attorney’s Office
District of Massachusetts


FOR IMMEDIATE RELEASE
Tuesday, August 2, 2016

Owner of Boston Cab Charged with Tax and Fraud Offenses

Owner and company agree to pay $2.3 million in restitution

BOSTON – Edward J. Tutunjian, who has owned and operated Boston Cab for more than four decades, was charged today in U.S. District Court with payroll tax evasion, employing illegal aliens and with failing to pay overtime wages.

Tutunjian’s company, EJT Management, Inc., through which he operated Boston Cab, also was charged with defrauding the U.S. Department of Housing and Urban Development (HUD) by enabling EJT employees to obtain federal housing subsidies to which they were not entitled. Both Tutunjian and EJT have signed plea agreements in which they agree to make full restitution for their crimes, totaling more than $2.3 million.
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Tutunjian allegedly concealed the size of the company payroll from the IRS, and thereby concealed the amount of federal employment taxes he and EJT would be responsible for paying. He did this by paying employees entirely or partially in cash and keeping such cash payments off the books. By doing this, he ensured there would be no record of cash payments that could be inspected by the IRS. Employees who were illegal aliens, and therefore not authorized to work in the United States, were allegedly paid entirely in cash. EJT did not issue W-2 forms to those employees and did not withhold or pay federal income tax, Social Security tax, or Medicare tax with regard to those illegal alien employees.

Other employees who were citizens or permanent resident aliens received their wages partly in cash and partly by check. Tutunjian filed quarterly employment tax returns for EJT which did not include the amounts which had been paid in cash to EJT employees. In this way, EJT evaded, and aided and abetted its employees in evading, approximately $739,204 in taxes from 2009 to 2013.

Tutunjian also allegedly did not pay the required overtime rate to employees who worked more than 40 hours a week. To conceal this, Tutunjian required certain employees to punch in 40 or fewer hours per week on an electronic time clock whose information was sent to the outside payroll company that prepared the payroll checks and W-2s, even though those employees had actually worked more than 40 hours per week, in some instances 50 or 60 hours a week. It is alleged that Tutunjian paid those workers in cash for their overtime hours, at the regular-time rate rather than the required time-and-a-half.

According to documents filed with the Court, a number of EJT’s employees were living in federally subsidized housing in Cambridge and elsewhere, some of which had waiting lists for prospective tenants. The amount of the federal housing subsidy, as well as the eligibility to live in the units, depended on the tenant’s income. HUD did not rely solely on a tenant’s statement of his/her income, but also compared it to the tenant’s W-2 wages and generally required employers such as EJT to provide written verification. From January 2009 to about May 2013, EJT allegedly aided certain employees to receive housing benefits to which they were not entitled, by providing payroll information, including W-2s, which did not reflect the wages paid to these employees in cash. Additionally, during the same period, EJT provided certifications to the state agency administering the housing subsidy program, which falsely reported the income of certain employees to be only the amounts paid by check but which did not include the wages paid to these employees in cash. In this manner, EJT aided certain employees to obtain HUD housing subsidies to which they were not entitled.
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