CROTON-ON-HUDSON, N.Y. Owners of the gourmet supermarket Zeytinia in Croton's Van Wyck Shopping Center have been indicted on charges of conspiring to hide $56 million in gross receipts from authorities, according to U.S. Attorney Preet Bharara.
Those accused in the multi-year skimming scheme face multiple-year prison terms, and at least two are facing 27 years in prison, if convicted. The nine owners are Adem Arici, Cevdet Arici, Omer Ipek, Erdal Kilic, Armagan Tanir, Atilla Yayla, Jody Vitale, Andrew Poma and Josefina Caraballo. There are six Zeytinia markets in New York, New Jersey and Connecticut.
They used their businesses as vehicles through which they could perpetrate their alleged crimes and will now be forced to answer for their conduct," said Bharara, U.S. Attorney for the Southern District of New York.
All the defendants are also charged with one count of felony endeavoring to obstruct and impede the administration of the IRS laws. Adem and Cevdet Arici, Ipek, Kilic, Tanir, Poma and Caraballo are also charged with multiple felony counts of subscribing to false and fraudulent federal personal income tax returns, and Adem and Cevdet Arici, Ipek, Kilic, Tanir, Vitale and Poma are charged with multiple felony counts of aiding and assisting in the preparation of false and fraudulent federal corporate, partnership and payroll tax returns.
The U.S. attorney's office said customers' credit card payments to the market were deposited into bank accounts. A small portion of cash payments were put into the markets' bank accounts, and remaining cash was diverted from the markets' records and used to pay cash business expenses, including the markets payrolls, sometimes to foreign citizens. Remaining cash was divided among market owners for personal use.
The district attorney's office said the scheme was concealed from federal and state tax authorities by filing false corporate and partnership tax returns that understated receipts of the markets. False sales tax returns and false personal income tax returns were also filed.
The U.S. attorney's office said a second set of books reflect the true income and expenses of the markets, and that owners of the markets failed to report $56 million from 2004 to 2009.
Market owners filed false forms understating the true salaries of employees, and in many cases failed entirely to report salaries documented in a second set of books. The U.S. attorney said the owners transferred assets into names of straw owners to conceal their ownership.
Market owners met with undercover federal agents posing as prospective buyers in late 2009. The U.S. attorney's office said that on three occasions various members of the markets' ownership told agents about the operation, including underreporting income and paying employees off the books. At the third meeting, Cevdet Arcici told undercover agents that owners skim a substantial portion of the receipts and divide up the cash.
Additionally, Adem Arici and his attorney, Marc E. Verzani, are charged with conspiring to violate, and violating, the Cuba trade embargo and engaging in witness tampering. Verzani is charged with obstructing justice.
Cevdet Arici was arraigned in White Plains Federal Court Thursday and remanded pending a $250,000 personal recognizance bond secured by $100,000 and two co-signers. Vitale was remanded pending a $200,000 personal recognizance bond secured by two co-signers. A hearing is set for Aug. 16 at 11 a.m.
If convicted, Adem Arici and Ipek face a maximum sentence of 27 years in prison, Caraballo faces a 20-year maximum sentence, Kilic, Tanir, Poma and Cevdet Arici each face a nine-year maximum sentence, Yayla faces an eight-year maximum sentence and Vitale faces a six-year maximum sentence.
Tanir, Caraballo and Poma were arraigned Monday and were released on bond, according to the U.S. attorney's office.