TRENTON – A Bergen County man who operated a tax preparation service has been sentenced to state prison for stealing $189,787 in checks that small business clients wrote to pay sales taxes or payroll withholding taxes to the State of New Jersey, State of New York and U.S. Government, Attorney General Jeffrey S. Chiesa announced.
Wayne Dunich Kolb, 47, of Saddle River, was sentenced today to four years in state prison by Superior Court Judge Thomas M. Brown in Mercer County. Dunich Kolb pleaded guilty on Sept. 14 to a charge of second-degree theft by failure to make required disposition of property received. As a requirement of the plea agreement, Dunich Kolb paid full restitution of $189,787 to the States of New Jersey and New York and the IRS. He also entered into a consent judgment to pay $85,991 representing interest on the stolen tax payments. Judge Brown ordered that Dunich Kolb never again hold himself out as an accountant or prepare any tax returns, other than his own.
Dunich Kolb ran a tax preparation service, Dunich-Kolb, LLC, and a consulting firm called Jadran Services Corp. In pleading guilty, he admitted that from January 2003 to January 2009, he stole 56 checks totaling $129,278 that clients wrote to pay business sales taxes to the State of New Jersey; seven checks totaling $7,151 that a client wrote to pay payroll withholding taxes to the State of New York; and 22 checks totaling $53,358 that clients wrote to pay federal payroll withholding taxes to the IRS. He deposited the checks into bank accounts he maintained. The state’s investigation revealed that he concealed his theft of the tax payments by either failing to file tax returns for the clients or filing returns falsely indicating the businesses owed no taxes.
Deputy Attorney General Denise Grugan prosecuted the case for the Division of Criminal Justice’s Financial & Computer Crimes Bureau. Dunich Kolb was charged in a Feb. 29 indictment that stemmed from a joint investigation by the Division of Taxation’s Office of Criminal Investigation and the Division of Criminal Justice. The investigation was conducted by Auditors Kevin Curry and Debra Lewaine of the Division of Taxation, and DAG Grugan.
“Prison is the right sentence for this defendant, who embezzled money over and over again,” said Chiesa. “He took advantage of the trust of his clients so that he could bankroll a lifestyle characterized by a luxury home, expensive cars and extensive travel. Meanwhile, he left many of the clients to face claims for delinquent taxes.”
“Hardworking business owners and consumers who hire a financial services provider to help them keep their finances in order can’t afford to be taken by a dishonest operator,” said Director Stephen J. Taylor of the Division of Criminal Justice. “By sending defendants like this one to prison, we will deter others in the industry who might consider defrauding their clients.”
“The integrity of tax professionals is a cornerstone of our system of voluntary tax compliance. We treat any evidence that a professional has put his or her interests ahead of those of his or her clients and the community with the utmost seriousness,” said State Treasurer Andrew Sidamon-Eristoff. “One of the missions of Treasury’s Office of Criminal Investigation is to pursue any evidence of misconduct in this arena aggressively.”
The investigation began when the Division of Taxation conducted a compliance audit of a small business that hired Dunich Kolb to prepare its New Jersey tax returns. The audit revealed that Dunich Kolb diverted sales tax payments from the business that were intended for the State of New Jersey into a bank account that he maintained and controlled. Further investigation revealed additional tax payment checks from various clients that were deposited by Dunich Kolb into multiple bank accounts that he maintained for Dunich Kolb, LLC. The Division of Taxation referred the case to the Division of Criminal Justice.
The investigation revealed that Dunich Kolb told clients to send their tax payments to him, and he represented that he would forward the payment to the state or federal government along with the client’s tax return. After Dunich Kolb stole their checks, diverting the funds into his bank accounts, some clients received delinquency notices from the government. They reported that they alerted Dunich Kolb, who told them he would take care of the issue.
In 1996, the New Jersey State Board of Accountancy obtained a court order requiring Dunich Kolb to cease and desist from holding himself out to the public as a certified public accountant because he did not have a CPA license. Despite the court order, he continued to present himself as a certified public accountant specializing in the area of tax planning for small businesses.