Bergen County Contractor Bought Vacations And Cars Instead Of Paying Employee Taxes: Feds

BERGEN COUNTY, NJ — A masonry contractor from Bergenfield failed to pay more than $3.8M in federal payroll taxes, instead spending the money on luxury cars and vacations, federal prosecutors say.

Nigel Kenneth Joseph, 45, was charged this week with 11 counts of failure to account for and pay over payroll taxes, two counts of wire fraud, and a count of identity theft for the actions of his Bronx-based masonry business BWK, said the U.S. Attorney's Office in the Southern District of New York.

“When a person purportedly leases luxury vehicles, buys NBA tickets and travels to tropical islands instead of paying payroll taxes for his employees, it is the American people who are victimized,” said IRS Special Agent in Charge Harry T. Chavis.

Prosecutors said that between 2019 and 2021, Joseph didn't collect payroll taxes from his employees and didn't pay the taxes he owed as an employer. But his private accountant submitted payroll records to the federal government, tipping them off, the complaint says.

Joseph failed to give employees W2 and 1099 forms, prosecutors say.

"Rather than pay taxes," says a release from the U.S. Attorney's Office, "Joseph used BWK funds to finance his own lifestyle—including by transferring tens of thousands of dollars to his wife; making personal rental payments; purchasing courtside NBA tickets and a Rolex; leasing a BMW 3-Series, a Mercedes GLE, and a BMW 5-Series; and traveling to the Dominican Republic and Jamaica."

Prosecutors say that Joseph told at least one employee that the IRS was "not paying attention" because of COVID.

The office of Jay Clayton, the U.S. attorney for the Southern District of New York, said the complaint specifically charges Joseph with "failing to pay years of employee payroll taxes, scheming to defraud a construction contractor of millions of dollars, and aggravated identify theft." This included misusing employees' Social Security Numbers, says the complaint.

Joseph was arrested on Tuesday and appeared before U.S. Magistrate Judge Ona T. Wang.

The release from the U.S. Attorney's Office refers to texts that Joseph exchanged with other associates.

"In a text message sent on or about February 3, 2022, Joseph expressed concern that the falsified certifications would be uncovered, writing in response to a warning from an employee that '[w]e have big problems . . . [w]ith the taxes,' that, 'Damn . . . I’m thinking I should not have put everyone working 35 hours every week..' On or about March 28, 2022, Joseph directed an employee in text messages that 'this is going to be the last month that we do this with [the] accountant . . . [a]nd then you and I gonna do it ourselves,' adding that he would 'fake it until we make it.' ”

Each of the 11 counts of failure to account for and pay payroll taxes carries a maximum sentence of five years in prison. The count of conspiracy to commit wire fraud carries a maximum sentence of 20 years in prison, prosecutors said.