DISTRICT ATTORNEY - NEW YORK COUNTY

NEWS RELEASE
December 19, 2007

Contact: Barbara Thompson
212.335.9400

Manhattan District Attorney Robert M. Morgenthau announced today that an owner of a Manhattan art gallery and the gallery itself have pleaded guilty to tax evasion.  As a result of these pleas, the defendants will pay $1.1 million to New York City and State.

The defendant is MICHAEL WEISBROD, owner of the defendant gallery, WEISBROD CHINESE ART, LTD.  The gallery is located at 36 East 57th Street.  WEISBROD pleaded guilty to one count of Sales and Compensating Use Taxes (Failure to Collect Taxes) and the gallery through its attorney pleaded guilty to one count of Repeated Failure to File; Utility Tax or Corporate Taxes.

The investigation leading to today’s pleas revealed that WEISBROD is a consultant who managed the overall operation of the gallery.  His father, a Toronto dentist and a collector of Chinese art, is the sole principal and founder of the gallery. The gallery sold Chinese art on both the retail and wholesale level.

WEISBROD admitted today that from January 31, 2002 to July 19, 2007, he failed to collect sales tax on the retail sale of art by the gallery with the intent to defraud the New York State Department of Taxation and Finance.

As a result of these pleas the defendants will pay $1.1 million to the New York State Department of Taxation and Finance and New York City Department of Finance.    That figure covers the evasion of New York State/New York City sales tax owed by the gallery for the sales tax quarters of December 1, 2000 through August 31, 2007, ($111,046.35), the evasion of New York State/New York City general corporation tax and corporate franchise tax owed by the gallery for fiscal years 2002, 2003, 2004 and 2005 ($260,000) and the evasion of New York State/New York City personal income tax for tax years 2002 through 2005 owed by Michael Weisbrod ($150,000).  Criminal fines ($300,000), interest and penalties ($300,000) are also included in the $1.1 million.

For their participation in the investigation, Mr. Morgenthau thanked the New York City Department of Finance, Commissioner Martha Stark, Assistant Commissioner, Tax Enforcement, Carlton Butler, and Director of Tax Enforcement Maureen Kokeas, Audit Group Chief Michael Schenk, Auditors Mitchel Marcus and Alfred Arena.

Mr. Morgenthau also thanked New York State Department of Taxation and Finance, and Acting Commissioner Barbara G. Billet and her entire staff, especially Chief Auditor Tommy Chan and Auditor Alicia Ferrer.
           
The case was handled by Assistant District Attorney Maurice Mathis, under the supervision of Assistant District Attorney Gilda I. Mariani, Chief of the Money Laundering and Tax Crimes Unit and assisted by Chief Financial Investigator Robert Demarest and Senior Investigative Accountant Michael Lentini and Investigative Analyst Mirela Miraj.  Joseph Pennisi, Chief of the New York County District Attorney’s Investigations Bureau, Jose Flores, Supervising Rackets Investigator, Senior Accountant Investigator Elodia Marco and  Investigator Jack Freck also assisted in this case.

Defendant Information

MICHAEL WEISBROD, 12/23/50
165 East 66th Street
New York, New York

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