Former Berlin Business Man Pleads Guilty in Tax Evasion Case

A former Berlin business man has pleaded guilty in two cases in U.S. District Court in Springfield in connection with evading payment of tobacco sales tax and operating an illegal check-cashing business.

On Thursday, Satish Kumar, 60, of Longmeadow, MA, pleaded guilty in one case to one count of conspiracy, three counts of wire fraud and one count of money laundering, according to the U.S. Department of Justice. In the second case, Kumar pleaded guilty to one count of failure to register a money transmitting business.

U.S. District Court Judge Mark. G. Mastroianni scheduled sentencing for April 13, 2016.

In 2006, Kumar purchased a wholesale warehouse business in Berlin. He was accused of systematically evading Connecticut state tobacco taxes, in selling cigars and smokeless tobacco to convenience stores and gas stations. “Kumar consistently filed false tobacco tax returns with Connecticut state tax authorities, paying just two percent of the tax owed. In 2008, Kumar sold the business, but he continued to receive proceeds from the continuing tobacco tax fraud that occurred at the Berlin warehouse,” according to authorities.

Authorities said that the fraud ceased in June 2012 when federal agents executed a search warrant at the Berlin warehouse and 12 other locations in Massachusetts, Connecticut, and Pennsylvania. “ During the six-year scheme, Kumar and others helped to evade over $16 million in taxes owed to the state of Connecticut,” authorities said in their statement.

In the illegal check cashing case, Kumar owned a liquor store in Springfield, that also acted as an unregistered money transmitting business. Kumar cashed checks without the required registration despite warnings from his bank. Among the checks cashed were 195 United States Treasury tax refund checks worth approximately $1.2 million obtained through fraudulent returns filed with the IRS.

The charges of conspiracy and failure to register a money transmitting business carry a maximum sentence of five years in prison, three years of supervised release and a $250,000 fine. The maximum sentence for wire fraud is 20 years in prison, three years of supervised release, and a fine of $250,000. The money laundering charge has maximum sentence of 10 years in prison, three years of supervised release and a fine of $250,000.