09-21-04 -- Cozzarelli, Frank J. -- Indictment -- News Release

Belleville Attorney Charged with Tax Evasion, Tax Fraud

NEWARK - Frank J. Cozzarelli, a Belleville lawyer, has been indicted for tax evasion and filing false federal income tax returns for the years 1996 and 1997, the U.S. Attorney's Office announced.

Cozzarelli, 51, of North Caldwell is expected to be arraigned on the Indictment, which was returned yesterday, within the next two weeks before the U.S. District Judge Jose L. Linares in Newark, to whom the case was assigned, according to Assistant U.S. Attorney James B. Nobile. Cozzarelli was not arrested by federal authorities.

The Indictment charges Cozzarelli with tax evasion and filing federal tax returns that were false in material respects for the tax years 1996 and 1997. The charges state that Cozzarelli evaded taxes by intentionally failing to report approximately $1,246,921 in income in tax year 1996 and approximately $396,377 in income for tax year 1997. The income was derived from Cozzarelli's participation in an investment venture involving foreign individuals and entities and the investment of approximately $7 million in capital in the United States.

The charges also state that Cozzarelli intentionally failed to report approximately $11,571 in interest income for 1996 and $16,577 in interest income for 1997 from the deposit of monies from this investment venture in bank accounts in New Jersey. The charges further state that, based on his conduct, there was approximately $488,375 in additional taxes due for tax year 1996 and approximately $138,956 in additional taxes due for 1997.

Counts One and Two charge tax evasion, each of which carries a maximum penalty of five years in prison and a $250,000 fine. Counts Three and Four charge tax fraud, each of which carries a maximum penalty of three years in federal prison and a $250,000 fine.

Under U.S. Sentencing Guidelines, the judge to whom this case is assigned would, upon conviction, determine the actual sentence based upon a formula that takes into account the severity and characteristics of the offense, and the defendant's criminal history, if any. Parole, however, has been abolished in the federal system. Under the Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

Despite Indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt following a trial at which the defendant has all of the trial rights guaranteed by the U.S. Constitution and federal law.

Special Agents of the IRS Criminal Investigation Division in Springfield, under the direction of Special Agent in Charge Patricia J. Haines, were credited for their work on the investigation.

The Government is represented by AUSA James B. Nobile, of the U.S. Attorney's Special Prosecutions Division, in Newark.

Defense Counsel: Franklin Sachs, Esq. Newark