Cartier Pleads Guilty in Sales Tax Evasion Scheme
Jan. 29, 1986
NEW YORK (AP) _ Cartier Inc. will pay $2.2 million as part of a plea bargain stemming from a scheme in which the jewelry store mailed dummy packages to out-of-state addresses so that customers would not have to pay sales taxes, officials said.
''This plea today is just one more proof of the pudding ... we're cracking down on every form of evasion in every tax,'' state Tax Commissioner Roderick G.W. Chu said Tuesday.
As part of the plea agreement, Cartier will pay $1.22 million for unpaid taxes, $647,000 in interest and $336,000 in fines, said state Attorney General Robert Abrams, calling the figure the ''largest sum ever paid in a tax case in the state's history.''
Abrams said store employees asked customers if they lived out of the state or had relatives who did. They then offered to send an empty package to the address so the customer could avoid paying the 8.25 percent sales tax.
Since the scheme was fostered by Cartier and not the customer, consumers who benefited from it would not be prosecuted, Abrams said.
Abrams said the case proved officials are serious about catching and vigorously prosecuting tax cheats, noting that there are just two days left to make restitution under the the state's Tax Amnesty program.
Cartier Inc., was nabbed under the ''Big Ticket'' project, directed at catching tax evaders on luxury high-cost purchases. Ben Thylan and his Ben Thylan Furs corporation also pleaded guilty for failing to collect sales taxes.
Other cases pending include those against the Bulgari, Carimati and Van Cleff & Arpels jewelry stores and Christie Brothers Fur Corp.
Cartier Inc., pleaded guilty in state Supreme Court to one count of falsifying business records, a felony.
The store, its manager, S. Howard Warnock, 42, and the assistant manager, Thomas J. Foster, 53, were indicted last March for allegedly scheming to avoid collecting city and state sales taxes on millions of dollars of over-the- counter purchases. The case against the two employees is pending.