United States Attorney's Office District of Connecticut
Press Release

WEST HAVEN CONTRACTOR WHO FAILED TO PAY MORE THAN $1 MILLION IN TAXES SENTENCED TO FEDERAL PRISON

Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that EDWARD R. PETRUCCI, age 48, of 414 Northwood Avenue, Orange, Connecticut, was sentenced today by Senior United States District Judge Peter C. Dorsey in New Haven for tax evasion. Judge Dorsey sentenced PETRUCCI to a term of imprisonment of two months, to be followed by six months at a halfway house, 12 months of home confinement, and three years of supervised release. Judge Dorsey also fined PETRUCCI $25,000 for the offense and ordered him to perform 300 hours of community service. On October 6, 2004, PETRUCCI waived indictment and pleaded guilty to a one-count Information charging him with attempted income tax evasion.

PETRUCCI is the owner and operator of several corporations that were in the business of insulation remediation and installation. These corporations, located in West Haven, Connecticut, included D & N Insulation, Incor Group, Petco Insulation, and Womco. According to documents filed with the Court, PETRUCCI admitted that during the years 1996 to 1999, he used corporate funds to pay for a variety of personal expenses, including gambling debts ($1,745,000), home improvements ($594,716), and furniture for PETRUCCI’s personal residences ($65,567). Although these and other payments were for the defendant’s personal expenses and were completely unrelated to any legitimate business purpose, PETRUCCI treated them as business expenses on the corporations’ tax returns and did not report any portion of these payments as income on his 1996 to 1999 personal tax returns. As a result of filing false corporate and personal tax returns, PETRUCCI evaded more than $1,000,000 in income tax liabilities.

PETRUCCI has agreed to pay the Internal Revenue Service the outstanding tax, penalties, and interest due on his 1996 to 1999 tax returns. Although PETRUCCI has already paid a portion of his outstanding tax liabilities, according to the prosecutor, he still owes the IRS more than $2 million in tax, penalties, and interest.

PETRUCCI faced a maximum penalty of five years of imprisonment and a $250,000 fine, and the federal Sentencing Guidelines prescribed a term of imprisonment of 18 to 24 months. Judge Dorsey departed downward from the sentencing guidelines based on PETRUCCI’s argument that a prolonged period of incarceration would have an adverse effect on his companies and numerous employees because PETRUCCI was indispensable to the successful management of the companies. Judge Dorsey also cited as reasons for departure PETRUCCI’s charitable contributions to the community, his diminished capacity resulting from a gambling addiction and obsessive compulsive disorder, the need for PETRUCCI to care for his elderly mother, and his own medical infirmities.

“We’re disappointed in this below-guidelines sentence,” U.S. Attorney O’Connor stated. The specter of federal prosecution and incarceration is a powerful incentive to scrupulous compliance with every citizen’s tax obligations. Despite the below guidelines sentence imposed here, this case is yet another example of the United States Attorney’s Office and its law enforcement partners vigorously enforcing compliance with revenue laws by prosecuting those who fail to report all their income and pay their fair share of taxes.”

“Individuals with serious gambling addictions who commit crimes to sustain your habit are encouraged to seek help for your problem before you find yourself in a federal courtroom,” U.S. Attorney O’Connor added.

This case was investigated by Special Agents of the Internal Revenue Service - Criminal Investigation. The case was prosecuted by Assistant United States Attorney John A. Marrella.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov