2 Cincinnati businessmen plead guilty to tax crimes on more than $12M

2 Cincinnati businessmen plead guilty to tax crimes on more than $12M
Posted at 2:30 PM, Aug 24, 2017
and last updated 2017-08-24 14:33:16-04

CINCINNATI -- Two former Cincinnati businessmen pleaded guilty Thursday to charges related to evaded income taxes on more than $12 million.

Vito Stramaglia, 49, owned about 29 demolition and other businesses including Vito Contracting Companies Inc., the Ice Box in Cleves, a car wash, an adult toy store and a nightclub in Florida since at least 2006, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division announced.

However, Stramaglia had not filed an individual or corporate income tax return since 1992 until he learned of the IRS's criminal investigation, according to Goldberg. The demolition business alone earned more than $12 million between 2008 and 2013.

Stramaglia's failure to file returns and pay taxes caused a loss to the U.S. Treasury of between $1 million and $2.5 million, officials said he admitted.

To hide his income, Stramaglia put businesses in the names of others, including Hugo Oliver Morales-Santamaria, 31, according to Goldberg. Santamaria opened a bank account in his name that was controlled by Stramaglia. Both men would cash checks and make withdrawals in amounts less than $10,000 on consecutive days in order to evade bank-reporting requirements.

Those cash transactions exceeded more than $1.4 million in 2011 and 2012 alone, according to Goldberg.

Stramaglia also gave false social security numbers to banks and car dealers for forms filed with the IRS when the transactions exceeded $10,000 and gave false employer identification numbers to contractors with whom he did business, according to Goldberg. Stramaglia used more than $3.4 million from his businesses to buy more than 20 luxury cars and at least four residences in others' names.

The two men also paid day laborers in cash and failed to withhold or report payroll taxes, according to Goldberg. Santamaria admitted to paying himself a weekly salary from the demolition company bank accounts and paying personal expenses including food, lodging and private school tuition out of the business bank accounts in an effort to avoid paying personal income taxes.

Stramaglia pleaded guilty to tax evasion and structuring cash transactions to avoid currency transactions reports. Santamaria pleaded guilty to structuring cash transactions to avoid currency transactions reports and conspiring to defraud the United States.

Both men face as much as five years in prison on each count, supervised release, restitution and monetary penalties.