2 Scarsdale Accountants Admit To Elaborate Tax Fraud Conspiracy

WESTCHESTER COUNTY, NY — Two Westchester accountants are paying the price for going too far to help clients avoid paying taxes.

Damian Williams, the U.S. Attorney for the Southern District of New York, and Thomas M. Fattorusso, the Special Agent in Charge of the New York Field Office of the IRS, Criminal Investigation, announced that George Sanossian and Jack N. Sardis pled guilty to conspiracy to defraud the IRS, on May 29 and June 5, respectively, in White Plains federal court.

"As they admitted in court, the defendants, both certified public accountants, conspired to fraudulently reduce the tax liability of clients of their accounting firm," Williams said. "This case serves as a reminder to all Americans that they are required to truthfully report their earnings and that criminal penalties could await those who fraudulently deceive the IRS, as George Sanossian and Jack Sardis have learned. My Office will continue to hold to account those who scheme to impede the lawful functions of the IRS."

According to court documents, Sardis and Sanosssian were certified public accountants and partners in a Scarsdale accounting firm that provided accounting and income and payroll tax services to clients, including nine construction businesses.

From 2012 to April 15, 2018, Sardis and Sanossian agreed with clients to scheme to fraudulently reduce the income tax liability of the clients; conceal wages paid to employees by the clients, thereby fraudulently reducing the clients' payroll tax liability; and conceal personal income of the clients.

Sardis and Sanossian advised the clients to participate in a scheme to reduce their federal income and payroll tax liability, in which the clients issued checks made payable to a shell company and gave the checks to the accountants, who then had the checks cashed at a check cashing service and returned the cash, minus a fee, to the clients. Sardis and Sanossian had over $2 million in checks cashed in this manner for their clients.

Some clients used the cash to pay employees without reporting the cash wages on their IRS Forms 941. This allowed them to evade both their employer contributions to Social Security and Medicare, and their obligation to withhold income tax on those wages, which then allowed the employees to evade federal and state income tax.

The owners and managers of some clients took cash for personal use without ever reporting the income on their personal federal and state tax returns.

"Schemes to conceal and reduce federal income and payroll tax liability, such as those utilized by Sardis and Sanossian, are unfair to every taxpayer who obeys the law and pays their fair share," Fattorusso said. "The prosecution of individuals who intentionally conceal income and evade taxes is a key step in the IRS’s enforcement strategy. These guilty pleas place the defendants a step closer to realizing the consequences of their actions."

66-year-old Sardis, of Englewood Cliffs, New Jersey, and 70-year-old Sanossian, of Scarsdale, pled guilty to one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison. They have agreed to pay restitution to the IRS and NYS in the amount of $652,883.60.

Sanossian’s sentencing before U.S. District Judge Cathy Seibel is scheduled for September 24, while Sardis’s sentencing before U.S. District Judge Nelson S. Román is scheduled for September 26.