NEW HAVEN — The owner of a Wallingford-based excavation and snow removal company pleaded guilty Friday to a federal charge he obstructed the Internal Revenue Service by avoiding withholding income taxes from the paychecks of employees.
Donald Cariati Jr., 44, of Meriden, pleaded guilty in New Haven federal court to to one count of obstructing the due administration of IRS laws, U.S. Attorney John H. Durham said in a statement. The charge carries a maximum three-year prison sentence. Cariati's sentencing is scheduled for June 4.
As part of as part of a plea agreement, Cariati agreed the total tax loss was estimated between $550,000 and $1.5 million.
Cariati, through his attorney Trent LaLima, of the Hartford-based law firm Santos & LaLima, declined comment.
Through Cariati Developers Inc., Cariati avoided his responsibility to withhold and pay over employees' income taxes to the IRS between 2013 and 2017, the statement said.
Durham's office charged Cariati and his company paid employees with company checks “asserting that they were independent contractors or subcontractors in order to evade the responsibility to withhold and pay over taxes to the IRS,” the statement said.
“Cariati also informed certain individuals that they were being paid off the books, meaning that their pay was not reported to the IRS,” the statement said.
The IRS began auditing Cariati Developers Inc., which is headquartered at 70 North Plains Industrial Road, Wallingford, in late 2015.
IRS investigators, over the course of the audit, also found a 2014 company invoice related to products Cariati had purchased for his personal cigarette boat. The audit revealed that Cariati had given the IRS the falsified invoice to make the purchase appear as though it was a business expense and not a personal expense.