David A. Sierleja, Acting United States Attorney for the Northern District of Ohio, announced today that a one-count Information was filed against Paul E. Sabatino charging him with willfully attempting to evade income taxes for the years 2002 through 2005. According to the Information and court records, Sabatino resided in Seven Hills and Twinsburg, Ohio, during the prosecution years and currently resides in Streetsboro, Ohio.

The Information alleges that during 2002 - 2005, Sabatino, an accountant, embezzled approximately $1,676,247 from a client of the CPA firm where he worked by causing checks to be written for his benefit and use on a bank account of the client. During that period Sabatino incurred gambling losses exceeding the amount of the embezzlement and he used most of the embezzled funds directly to pay his gambling expenses. The Information charges Sabatino with attempting to evade taxes of approximately $510,079 owing for those years by taking affirmative conduct to conceal the embezzlement income, as follows: for the years 2002 through 2004, Sabatino filed false income tax returns, on which he failed to report the embezzlement income; for the year 2005, he concealed the embezzled funds by laundering them with the assistance of a friend, Jonathan S. Solonche.

According to the Information, for 2002 through 2004, Sabatino deposited approximately $1,184,029 of the embezzled funds into a bank account he maintained in the name of a non-existent landscaping business, under the name Northcoast Landscape Design. He reported only $228,200 of those funds on his tax returns, by showing them as Schedule C business receipts of the purported landscaping business. Starting in May 2005, Sabatino began laundering the embezzled funds by providing checks to his friend, Jonathan S. Solonche, either payable to Solonche or payable to a defunct business of Solonche’s (known as Turnkey Lighting & Sound). At Sabatino’s direction, Solonche deposited the checks and provided most of the deposited funds back to Sabatino, keeping approximately $37,517 for his own use.

On February 22, 2008, Solonche was charged in a separate Information with attempting to evade taxes owing on his $37,517 share of the embezzled funds. Solonche entered a guilty plea before Magistrate Judge George J. Limbert and is scheduled to be sentenced by Judge Peter C. Economus on July 14, 2008.

If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The government’s case is being prosecuted by Assistant United States Attorney John M. Siegel, following an investigation by the Internal Revenue Service, Criminal Investigation Division, Cleveland, Ohio. The investigation is continuing.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.