10-12-2005 -- Patel, Natu -- Guilty Plea -- News Release

South Brunswick Business Owner Admits Tax Evasion, Cash Structuring

NEWARK - A South Brunswick man pleaded guilty today to one count of tax evasion and one count of structuring financial transactions to evade the reporting requirements of the U.S. Postal Service, U.S. Attorney Christopher J. Christie announced.

Natu Patel, 53, admitted that he skimmed cash from the business income at his two New Jersey motels and failed to declare the cash income on his and his wife's personal income tax returns. He also admitted to using that cash income to purchase money orders from the U.S. Postal Service and depositing the money orders with several investment brokerage companies.

Patel entered his guilty plea before U.S. District Judge William Martini, who scheduled sentencing for Feb. 16.

According to the government attorney handling the case, Assistant U.S. Attorney Kevin Walsh, the U.S. Postal Inspection Service became interested in Patel's activities after records from the Postal Service and financial institutions revealed that, from 1992 through 2001, Patel and his wife had purchased more than 420 postal money orders in groups of four and five, with each group of money orders totaling just less than $3,000.

At the plea hearing, Patel admitted that he knew that if he purchased a group of money orders totaling more than $3,000, he would have been required to provide identification and other information to the Postal Service. Instead, and in violation of federal law, the defendant purposefully structured his transactions so as to thwart the Postal Service from reporting his money order purchases to the U.S. Treasury.

Cash structuring is illegal, and is often employed to move large amounts of cash in smaller pieces to avoid requirements by financial institutions to file reports concerning larger cash transactions. Structuring is often associated with criminal activity, including money laundering, tax evasion or other crimes.

"We regularly catch and prosecute people structuring cash this way," said Christie. "They attempt to fly under the radar screen with small deposits while they commit some other crime, in this case tax evasion. The pattern is not as difficult to detect as people mistakenly believe."

Under the terms of his plea agreement, Patel agreed that the tax loss to the United States was more than $120,000 but less than $200,000. His plea agreement also required him to pay back taxes, penalties, and interest totaling more than $240,000, which he paid to the IRS immediately prior to the plea proceedings in court today. He also agreed that his structured money order purchases from the U.S. Postal Service totaled $295,700.

Patel faces a maximum sentence of five years in prison on each of the tax evasion and structuring counts to which he pleaded guilty. The Government believes that a proper application of the U.S. Sentencing Guidelines should result in a sentence of between 12 and 18 months in prison.

The Sentencing Guidelines are advisory, however, and the Sentencing Judge could impose more or less time, depending upon various factors presented to the Court at that time. Parole has been abolished in the federal system. Under the Sentencing Guidelines, defendants who are given federal custodial terms must serve nearly all that time in prison.

Christie credited the Postal Inspectors with the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Thomas C. Van de Merlen, and Special Agents from the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent in Charge Patricia J. Haynes, with developing the case against the defendant. The government is represented by Assistant U.S. Attorney Walsh of the Public Protection Unit in Newark.

-end-

Defense counsel:

Lawrence Horn, Esq., Newark

Richard Sapinski, Esq., Newark