NEWARK, N.J. – A Brooklyn, New York, man admitted underreporting the proceeds of his buyout agreement on his income tax return, U.S. Attorney Philip R. Sellinger for the District of New Jersey and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division announced today.
David Seruya pleaded guilty on July 28, 2022, before U.S. District Judge Julien X. Neals in Newark federal court charging him with three counts of tax evasion.
According to court documents filed in this case and statements made in court:
From 2009 to 2014, Seruya was an original owner and shareholder of a New Jersey-based home warranty business. In 2014, Seruya entered into a buyout agreement whereby he agreed to sell his shares of stock back to the business and exit the company. In exchange for his stock shares, the home warranty company agreed to pay Seruya $4.1 million, which included a lump sum payment and installment payments spread out over 24 months. Seruya underreported to his return preparer the actual amount of income he received from the sale of his stock. In addition, Seruya did not inform his return preparer about income received from canceled mortgage debt. As a result, Seruya caused his return preparer to prepare and file false income tax returns for the tax years 2014 through 2016. Seruya admitted to evading taxes for calendar years 2010-2013. In total, Seruya’s tax evasion caused a loss to the IRS of more than $1.1 million.
The counts to which Seruya pleaded guilty are each punishable by a maximum of five years in prison and a fine of $100,000, or twice the gross pecuniary gain or loss, whichever is greatest. Sentencing is scheduled for Dec. 14, 2022.
U.S. Attorney Sellinger and Acting Deputy Assistant Attorney General Goldberg credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Carolyn Silane for the District of New Jersey and Trial Attorney Shawn Noud of the Tax Division.