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David B. Fein, United States AttorNey for the District of Connecticut, today announced that Philip Ney, 61, of Northford, waived his right to indictment and pleaded guilty yesterday before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport to one count of filing a false federal income tax return. In pleading guilty, Ney admitted that he under reported his income by more than $640,000 for the 2004 through 2008 tax years.
Ney is scheduled to be sentenced by Senior United States District Judge Warren W. Eginton on February 21, 2013, at which time Ney faces a maximum term of imprisonment of three years and a fine of up to $250,000. As part of the resolution of this case, Ney has agreed to pay $192,671 in back taxes, plus penalties and interest, for the 2004 through 2008 tax years.
In pleading guilty to one count of filing a false federal income tax return, Ney admitted that on April 15, 2009, he signed and filed his 2008 U.S. Individual Income Tax Return, Form 1040, which falsely reported Schedule C gross business receipts of $529,934 and the amount of tax due of $28,544. In fact, Ney's actual gross business receipts for 2008 were $771,615 and he should have paid $107,377 in federal income tax.
According to court documents and statements made in court, Ney owns and operates Empire Restoration Company in Northford, which provides residential and commercial roofing services, as well as snow plowing services. From 2004 through 2008, part of the income derived from those services was deposited into Ney's business checking account, and part was deposited into his passbook savings accounts. When preparing his federal tax returns for the 2004 to 2008 tax years, Ney's tax return preparers asked him to report all of the business income. However, Ney did not provide his tax preparers with three passbook savings accounts deposit information for ERC's business income. For the 2004 through 2008 tax years, Ney failed to report on his tax returns a total of $640,581 in income that had been deposited into his savings accounts.
This matter was investigated by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States AttorNey Peter S. Jongbloed.