Owner Of H & H Bagels Pleads Guilty To Unemployment Insurance Tax Manipulation

Helmer Toro, the owner of H & H Bagels in New York, has pleaded guilty to charges of Grand Larceny, Offering a False Instrument for Filing, and to a violation of Labor Law for unemployment insurance tax manipulation. According to the government, Toro collected but failed to pay more than $369,000 withheld from the payroll of the employees of his bagel business. This case is the first prosecution of unemployment insurance tax rate manipulation under the New York State Unemployment Tax Act, which became effective in January of 2006. 

According to documents filed in court: Toro filed city and state withholding tax returns under six different company names. On several occasions, Toro made nominal payments to the N.Y. State Department of Taxation and Finance, even though he knew he was obligated to turn over all withheld tax. Using shell companies, Toro manipulated his unemployment insurance tax rate by transferring a large segment of his workforce from one business to a new business. Toro did this to obtain a lower employment insurance tax rate.
 
Our prior post on this case is available at http://www.financialfraudlaw.com/lawblog/it%E2%80%99s-not-onions-making-bagel-shop-owner-cry-%E2%80%93-it%E2%80%99s-tax-fraud-indictment/510.