Date: 03-02-2018

Case Style:

Case Number: 7:16-cr-00466-NSR

Judge: Nelson S. Romain

Court: United States District Court for the Southern District of New York (Westchester County)

Plaintiff's Attorney: Olga Zverovich, Vladislav Vainberg, and Daniel Noble

Defendant's Attorney: Michael Howard Sussman

Description: White Plains, NY - Disbarred Orange County Attorney Convicted of Mail Fraud, Structuring Cash Transactions, Making False Statements to the IRS, Obstructing the IRS, Tax Evasion, Obstruction of Justice, and Perjury

JOSEPH G. SCALI was convicted for mail fraud, structuring cash transactions, making false statements to the IRS, obstructing the IRS, tax evasion, obstruction of justice, and perjury. The jury convicted SCALI on March 11, 2018 on all 10 counts of the Indictment following a four-week trial before Judge Nelson S. Román.

U.S. Attorney Geoffrey S. Berman said: “Joseph Scali, a disbarred attorney, abused the law to commit the serious crimes of which he now stands convicted. Scali stole money from a client’s attorney escrow account, chronically abused the tax laws to obstruct the IRS and hide income, and defrauded a client into paying him legal fees after he had been suspended from practicing law in New York. We thank the IRS and U.S. Postal Inspection Service for their substantial work in helping to secure this conviction.”

According to the Indictment, other court filings, and evidence presented at trial:

From January 2011 through August 2012, SCALI, who represented the seller of land and mineral rights in Pennsylvania, schemed to defraud the prospective purchaser of that property of the $850,000 the latter had given to SCALI to hold in escrow by misappropriating those funds from his Attorney Trust Account. SCALI also engaged in tax evasion for the 2011 and 2012 years by, among other things, deliberately withholding from the IRS his Attorney Trust Account records, which would reveal the funds he had misappropriated.

In addition, between 2006 and November 2013, SCALI corruptly endeavored to obstruct the IRS by (a) providing materially false, incomplete, and misleading information to an IRS Revenue Officer about his filing history and income; (b) commingling client funds and personal funds in his Attorney Trust Account; (c) paying for personal items directly out of his Attorney Trust Account; (d) structuring $32,400 in cash deposits into his Attorney Trust Account. In addition, SCALI failed to timely file U.S. Individual Income Tax Returns, Forms 1040, for the years 2006 through 2012, as well as U.S. Corporate Income Tax Returns, Forms 1120, for his law firm, Joseph G. Scali, P.C., for the years 2007 through 2012, notwithstanding that he was required by law to file a return for each year. SCALI was separately convicted of making false statements to the IRS and structuring cash deposits.

SCALI also committed obstruction of justice and perjury when, in seeking to set aside his disbarment by the United States District Court for the Southern District of New York, he lied under oath to that court about why, in 2013, he had been suspended from practicing law in New York by the Second Department of the Appellate Division of the New York State Supreme Court. SCALI was disbarred by the Appellate Division on July 6, 2016.

In 2014 and 2015, SCALI committed mail fraud by fraudulently undertaking a legal representation of a client for a fee without disclosing his 2013 suspension from the practice of law in New York State.

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SCALI, 68, of West Hartford, Connecticut, is convicted of two counts of mail fraud, which carry a maximum sentence of 20 years in prison; one count of structuring cash transactions, which carries a maximum sentence of five years in prison; two counts of making false statements to the IRS, which carry a maximum sentence of five years in prison; one count of obstructing the IRS, which carries a maximum sentence of three years in prison; two counts of tax evasion, which carry a maximum sentence of five years in prison; one count of obstruction of justice, which carries a maximum sentence of 10 years in prison; and one count of perjury, which carries a maximum sentence of five years in prison.

SCALI is scheduled to be sentenced by Judge Román on June 1, 2018.

The statutory maximum and minimum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the work of the IRS and the U.S. Postal Inspection Service in this investigation. Mr. Berman also thanked the Orange County District Attorney’s Office, the New York State Department of Taxation and Finance, and the New York State Police for their assistance. Mr. Berman also thanked the Counsel for the Grievance Committee for the Ninth Judicial District of New York State, the Counsel for the Committee on Grievances for the U.S. District Court for the Southern District of New York, and the Counsel for the IOLA Fund of New York for their cooperation in the investigation.

This case is being handled out of the White Plains Division.

Outcome: Guilty

Plaintiff's Experts:

Defendant's Experts:

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