New York.- Manhattan District Attorney Robert M. Morgenthau announced the indictment of a Manhattan attorney and a law firm for stealing a $735,000 deposit in a real estate transaction as well as a separate felony complaint for the lawyerʼs failure to pay withholding taxes and filing his own false tax returns. Amenakis pleaded NOT GUILTY to all charges.
The defendants, JAMES JOHN ARMENAKIS, 65, and his law firm of ARMENAKIS & ARMENAKIS, P.C., were indicted on charges of grand larceny and criminal possession of stolen property. In a separate investigation, the defendant JAMES JOHN ARMENAKIS was charged in a felony complaint with grand larceny and multiple counts of filing false instruments. The investigation leading to the indictment revealed that ARMENAKIS and the firm represented the seller of a condominium located at 285 Lafayette Street in Manhattan. The purchase price of the condominium was $7.35 million. Upon the signing of the contract of sale in October 2007, the purchaser gave ARMENAKIS a 10 percent deposit of $735,000 to be later deducted from sale price of the apartment at the closing. Pursuant to the contract of sale, ARMENAKIS deposited the $735,000 into his attorney escrow account. On May 2, 2008, the day of the closing, ARMENAKIS did not appear, nor apply the $735,000 to the sale price of the apartment and has failed to return the funds to purchaser. The investigation disclosed that ARMENAKIS had spent the money on personal items.
The investigation leading to the felony complaint revealed that during the period of February 2002 through October 2008, ARMENAKIS failed to remit approximately $98,000 to the New York State Department of Taxation and Finance. This money was withheld from his employeesʼ salaries, and held in trust by the defendant as a fiduciary. In addition, during that same time period, the defendant filed 2002, amended 2003, and 2004 through 2007 New York personal income tax returns claiming the entire gross payroll, including the taxes withheld but never paid over to State Tax Department as a business expense, and thereby under-reported his taxable income and tax liability in all six years.
Mr. Morgenthau said tax scoffers increase the load on an already overburdened taxpaying public and will not be tolerated. The theft of payroll taxes is a huge national problem in the tens of billions of dollars on the federal, state and local levels.
ARMENAKIS is charged in the indicted case with Grand Larceny in the Second Degree and Criminal Possession of Stolen Property in the Second Degree, both class C felonies which are punishable by up to 15 years in prison. ARMENAKIS is charged in the felony complaint with a separate count of Grand Larceny in the Second Degree. He is also charged with six counts of Offering a False Instrument for Filing in the First Degree, a class E felony, which is punishable by up to 4 years in prison.
Both defendants are scheduled to be arraigned today.
Mr. Morgenthau thanked New York State Department of Taxation and Finance Commissioner Robert Megna, Deputy Commissioner William Comiskey, Managing Tax Auditor Stan Milstein, and Tax Auditors David Simmons and Hui Qing Cheu.
Assistant District Attorney Carey Ng presented the case to the grand jury and will be in charge of the prosecution under the supervision of Rackets Bureau Chief Eric Seidel. The tax investigation is being conducted by Assistant District Attorney Gilda Mariani, Chief of the Money Laundering and Tax Crimes Unit. Chief Financial Investigator Robert Demarest, Senior Investigative Accountant Michael Lentini and Investigative Analyst Jason Campiola of the Money Laundering and Tax Crimes Unit also assisted. Investigators Matthew Neary, Jonathan Savel, and Sioban Berry participated in the investigations under the supervision of Joseph Pennisi, Chief of the Investigations Bureau.