11-14-2003 -- Bruton/Badick -- Guilty Pleas -- News Release

Two Restaurateurs Admit Payroll, Sales Tax Evasion

NEWARK - Two former shareholders and principals of restaurants in Ramsey, New Jersey and Orangeburg, New York today admitted that they conspired to evade approximately $835,800 in payroll and sales taxes between 1993 and 2000, U.S. Attorney Christopher J. Christie announced.

Christopher T. Bruton, 44, of Suffern, N.Y., and Leon Badick, 40, of Congers, N.Y. - the former owner-operators of two restaurants, each named Company B's" - pleaded guilty before U.S. District Judge Harold A. Ackerman to separate one-count Informations charging conspiracy to evade taxes.

Bruton and Badick each face a maximum penalty of five years in federal prison and a $250,000 fine on the conspiracy counts. Judge Ackerman scheduled their sentencings for Feb. 16.

Under U.S. Sentencing Guidelines, Judge Ackerman will determine the actual sentences based on a formula that takes into account the severity and characteristics of the offense and the defendants' criminal history, if any. Parole has been abolished in the federal system. Under the Sentencing Guidelines, defendants who receive custodial terms must serve nearly all that time.

According to the Informations to which they pleaded guilty, the defendants unlawfully concealed and under-reported the total salary and wages paid to the Corporations' employees by approximately $2,792,772 in order to evade approximately $477,407 in payroll taxes.

The defendants also sought to avoid detection of the payroll tax evasion scheme by concealing and retaining approximately $358,397 in sales taxes collected from "Company B's" patrons on behalf of the states of New Jersey and New York. The defendants did this so that the number of employees reported by the corporations for payroll tax purposes would appear to be consistent with their gross receipts reported for sales tax purposes and, thereby, not raise suspicions relative to the evaded payroll taxes, according to the charges.

Under an Information a defendant waives the right to have his case presented to a grand jury and, instead, pleads guilty to charges filed by the Government.

Christie credited Special Agents of the Criminal Investigation of the IRS, under the direction of Special Agent in Charge Patricia J. Haynes, with developing the cases against Bruton and Badick.

The Government is represented by Assistant U.S. Attorney Lorraine S. Gerson, of the U.S. Attorney's Commercial Crimes Unit in Newark.

-end-

Defense Counsel:

for Bruton: Leonard Reed Rosenblatt, Esq. Elizabeth, N.J.

for Badick: Harvey S. Barr, Esq. Spring Valley, N.Y.