2003-07-24 -- Lavilla, Peter -- Guilty Plea -- News Release

Former Guttenberg Mayor Pleads Guilty to Tax Evasion; Admits Taking Campaign Funds

NEWARK - The former mayor of Guttenberg in Hudson County pleaded guilty today to filing a false tax return, admitting that he misappropriated $16,420 in campaign contributions and used them to trade stocks in a personal brokerage account, U.S. Attorney Christopher J. Christie announced.

Peter Lavilla, 63, a two-term mayor in Guttenberg between 1996 and 2000, admitted that he moved the donated campaign funds between several accounts before finally depositing them into a personal interest-bearing brokerage account with TD Waterhouse Investor Services in New York.

Lavilla, now a resident of North Bergen, entered his guilty plea before U.S. District Judge Dickinson R. Debevoise, who set sentencing for Nov. 10. Lavilla faces a maximum penalty of three years in prison and a $100,000 fine.

Lavilla told Judge Debevoise that, between January 1996 and January 1998, he received $16,420 in mayoral campaign donations and deposited them into "The Lavilla Team" account, which he created and controlled at Guttenberg Savings and Loan.

Lavilla also created an account at Hudson United Bank for the purpose of holding funds raised by "The Peter Lavilla Civic Association," which Lavilla said he created with the stated purpose of providing financial assistance to citizens of Guttenberg. At the same time, Lavilla owned and operated "Senior Citizens Today," a free monthly publication in Guttenberg since 1989. An account was held in the name of the magazine at First Union National Bank in Guttenberg.

Lavilla admitted that he moved the $16,420 in campaign funds from The Lavilla Team account, to the Civic Association account on Jan. 8, 1998. He subsequently moved all the funds to the Senior Citizens Today account and then, on Nov. 4, 1998, into his personal account at First Union National Bank in Guttenberg.

Finally, Lavilla admitted, he withdrew approximately $19,611 - including the $16,420 in campaign funds - from his personal account and deposited the total amount into a TD Waterhouse brokerage account, which he used to trade stocks.

Lavilla admitted that he failed to report to his tax preparer the $16,420 in additional income from the campaign funds he had moved through the accounts. Lavilla admitted that for tax year 1998, he reported adjusted gross income of $90,817, which did not include the $16,420 in additional income.

Under U.S. Sentencing Guidelines, Judge Debevoise will determine Lavilla's 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 has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Louie F. Allen in Newark; and Special Agents of the IRS Criminal Investigations section, under the direction of Special Agent in Charge Anne D. Fahy in Newark.

The case is being handled by Assistant U.S. Attorney Luis A. Valentin of the U.S. Attorney's Office Special Prosecutions Division in Newark.

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Defense Counsel:

Dennis McAlevy, Esq. Union City