2002-05-30 -- Dionisio, Thomas & Bober, Jonathan -- Guilty Plea -- News Release

Owners of Fair Lawn Salon Admit Tax Evasion, Concealment of Cash Wages Paid to Employees

NEWARK - The owners of a Fair Lawn beauty salon pleaded guilty today to conspiracy to file false tax returns, which concealed cash paid to themselves and to employees of the salon, U.S. Attorney Christopher J. Christie announced.

Thomas Dionisio, 69, of Wyckoff, and Jonathan Bober, 56, of Elmwood Park, entered their pleas before U.S. District Judge William H. Walls, who set sentencing for Sept. 10.

According to the Informations to which they pleaded guilty, Dionisio and Bober, who owned the Anthony Dionisio Hair and Skin Center in Fair Lawn, conspired to procure and present false Employer's Quarterly Federal Tax returns to the Internal Revenue Service. These returns failed to report cash wages paid to employees of the Salon, as well as cash payments made to Dionisio and Bober themselves.

Dionisio also pleaded guilty to one count of personal tax evasion for knowingly failing to report over $390,000 in long-term capital gains on his 1999 tax return, according to Assistant U.S. Attorney Amy Winkelman.

Bober faces a maximum prison sentence of five years, and a fine of up to $250,000. Thomas Dionisio faces a maximum prison sentence of 10 years, and a fine of up to $350,000. In addition, the defendants must file amended personal tax returns prior to sentencing.

According to the Informations, beginning at least in 1997 the defendants caused their salon, known as Anthony's Salon, to enter into agreements with certain salon employees to pay some or all of their wages in cash. The defendants admitted in court that they instructed the Salon's bookkeeper to distribute compensation to salon employees in the form of both payroll checks and cash payments, using the Salon's cash receipts to pay the cash portion of the payroll. In order to conceal the existence of a cash payroll, the bookkeeper was also instructed to destroy payroll registers that indicated which portion of each employee's total compensation was paid by check and which by cash.

Each week from at least 1997 to in or about April 2001, the salon paid certain of its employees thousands of dollars in cash wages, according to the Informations. Dionisio and Bober admitted that they too received weekly cash payments from the salon.

The defendants further admitted that the salon's bookkeeper was instructed to provide the salon's outside payroll service only with information reflecting the wages paid to salon employees by check. As directed, the bookkeeper did not advise the payroll service of the cash wages paid to salon employees, or of the cash payments received by the defendants themselves. Using the information provided by the salon, the payroll service prepared and filed with the IRS Employer's Quarterly Federal Tax Returns on behalf of Anthony's Salon. These returns were incorrect in that they failed to report thousands of dollars in additional cash wages, paid to salon employees, that were subject to federal income tax withholding, Federal Insurance Contributions Act taxes and Medicare taxes.

According to the Informations, the defendants caused Anthony's Salon to fail to report at least $1.3 million in wages paid to Salon employees, resulting in a tax loss of at least $300,000.

Under U.S. Sentencing Guidelines, Judge Walls will determine the defendants' actual sentences based upon a formula that takes into account the severity and characteristics of the offenses and the defendants' criminal histories, if any.

Parole has been abolished under the federal system. Under the Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

In the filing of a felony Information, a defendant waives the right to have his or her case presented to a federal Grand Jury and, instead, pleads guilty to charges presented by the Government.

Christie credited Special Agents of the IRS Criminal Investigation section, under the direction of Special Agent in Charge Anne D. Fahy, and Special Agents of the FBI, under the direction of Special Agent in Charge Phillip W. Thomas, with developing the case.

The Government is represented by Assistant U.S. Attorney Winkelman of the Fraud and Public Protection Division of the U.S. Attorney's Office in Newark.

-end-

Defense Counsel:

Thomas Dionisio: John J. Fahy, Esq.

Jonathan Bober: Robert L. Galantucci, Esq.