Pennsylvania Man Sentenced To Prison After His Mega-Mansion Attracted Notice From Feds

Taxes

Joseph Nocito, age 81, of Sewickley, Pennsylvania, has been sentenced to one year and one day in prison for conspiring to defraud the U.S..

Nocito, former CEO and President of Pittsburgh-based Automated Health Systems, will also serve three years of supervised release, which includes six months on home detention, and pay approximately $15,824,056 in restitution.

According to court documents and statements, between 2006 and 2012, Nocito illegally classified millions of dollars of personal expenses as deductible business expenses. That included millions of dollars to pay his butler, cook, and landscaper, as well as finance luxury vehicles, including a 2008 Rolls Royce Phantom, Jaguar, and Maserati. Other expenses included artwork, country club memberships, homes for his children, and private school tuition for grandchildren. He listed these expenses on company ledgers using descriptors like “advertising” and “interest.”

Nocito also diverted funds, characterized as deductible expenses, to finance the construction of a 51,000-square-foot mansion called “Villa Noci” valued at approximately $30 million. The falsified expenses included interior and exterior construction costs, design and furnishings, an outdoor pool and pool house, tennis, basketball, and bocce courts, and landscaping for the grounds.

The size of the home, considered the largest in Pennsylvania at the time, is precisely what attracted attention to Nocito in the first place. According to local sources, federal agents flying in and out of Pittsburgh noticed the size and scope of the mansion and started asking questions. Those questions eventually led to a guilty plea in 2015 from Ann E. Harris, Nocito’s personal assistant, secretary, and bookkeeper, in a tax evasion scheme.

At the time, Nocito’s attorney referred to it as “a tax dispute, nothing more.”

That eventually changed. Nocito was formally indicted in February of 2018. On November 17, 2022, he pleaded guilty to count 1 of the indictment, which charged him with conspiracy to defraud the U.S.

“The defendant diverted millions of dollars that should’ve gone to the IRS and used it to build a 51,000 square foot mansion in the Pittsburgh suburbs, amounting to the largest tax fraud ever perpetrated in our District,” said U.S. Attorney Eric G. Olshan. “This crime is an affront to every hardworking, tax-paying individual in this country. We commend our partners with IRS Criminal Investigation and the U.S. Postal Inspection Service for their thorough and tireless efforts to hold this defendant accountable for his egregious conduct.”

In addition to filing false personal returns, Nocito was accused of underreporting AHS’s corporate profits by shuffling millions of dollars of income through other entities in fraudulent transactions designed to conceal the company’s true income and tax liability. Among other things, Nocito made recurring, sham payments from AHS to other entities he controlled, falsely characterizing the transactions as payments for management, administrative, or consulting expenses. He then deducted the expenses in AHS’s corporate income tax returns.

“Today’s sentencing brings Mr. Nocito’s massive scheme to defraud the IRS to a conclusion,” said Yury Kruty, Special Agent in Charge of IRS-Criminal Investigation. “Tax fraud of this magnitude, never before seen in this Judicial District, deserves to be punished and today was Mr. Nocito’s day of reckoning. Honest taxpayers suffer when self-admitted criminals like Mr. Nocito swindle the government. The Special Agents of IRS-CI, our law enforcement partners, and the Department of Justice remain steadfast in our dedication to prosecuting those who carry out schemes that cheat the government and hurt those who pay their fair share.”

Articles You May Like

How to optimize your holiday travel budget on ‘Travel Tuesday’
73% of workers worry Social Security won’t be able to pay retirement benefits. Here’s what advisors say
How To Have Difficult Conversations With Stubborn Aging Parents
GM lays off 1,000 employees amid reorganization, cost-cutting
Most employees don’t leverage this ‘triple-tax-free’ account, advisor says. Here’s how to use it

Leave a Reply

Your email address will not be published. Required fields are marked *