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July 23, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Westchester lawyer suspended two years for stealing $400,000 in sales taxes

Convicted White Plains lawyer Peter V. Spagnuolo was suspended June 5 from practicing law for two years for stealing state sales tax payments from two restaurants.

A state appellate court had suspended him in January 2018 for the same crimes and then given him a chance to show why he should not receive a final order of suspension, censure or disbarment.

Peter Spagnuolo

Spagnuolo “failed to meet his burden of establishing why this court should not issue a final order of public discipline,” five justices of the Second Appellate Division in Brooklyn ruled.

Spagnuolo owned the Desert Moon Café and a Nathan’s Famous Hot Dogs eatery at The Westchester mall in White Plains. He maintained a law office in Mount Kisco.

For six years, from 2009 to 2015, according to court documents, he collected sales taxes from customers but pocketed the money and failed to file tax returns.

The Westchester County district attorney charged Spagnuolo and his companies in 2017 with felony charges of grand larceny and tax fraud. He was permitted to enter a guilty plea to a misdemeanor after he paid restitution of $403,719 for the sales taxes and personal taxes.

Westchester Supreme Court sentenced him to probation for one year and his companies to three years.

Last summer, the Ninth Judicial District Attorney Grievance Committee held a hearing on the circumstances of the crimes.

Spagnuolo admitted that his conduct was illegal and morally wrong, according to the appellate ruling summarizing his testimony, “and if he was confronted with the same circumstances he would act differently and close the businesses and figure out a way to pay what he owes.”

He stated that his actions crippled him financially and he felt remorse for disgracing his family and the legal profession. He still owed $1.2 million in interest and penalties for the tax infractions and “he intends to start paying these obligations when he is able to do so.”

He also owes $115,062 for unpaid federal income taxes in 2016, according to a tax lien filed in October.

His attorney, Hal R. Lieberman, argued for a censure, or for a suspension of no more than six months, retroactive to the original interim suspension.

Spagnuolo had cooperated with investigators and apologized for his misconduct, Lieberman contended. He had harmed no clients – though Spagnuolo admitted that he did harm the public – and that his restitution evidenced good character.

Justices Alan Scheinkman, Ruth Balkin, Mark Dillon, William Mastro and Reinaldo Rivera agreed with the grievance committee recommendation for discipline.

He had knowingly stolen tax revenues for a protracted period, the justices ruled. Although he made restitution, he still owes $1.2 million in interest and penalties. And his disciplinary record “is not unblemished, as he has received two admonitions and a letter of caution.”

The justices suspended him for two years but granted credit for the elapsed time from the January 2018 interim suspension. He may start the process of asking for reinstatement next month.