FOR IMMEDIATE RELEASE TAX WEDNESDAY, JANUARY 29, 1997 (202) 616-2765 TDD (202) 514-1888 FOUR INDICTED IN $17 MILLION EXCISE TAX FRAUD SCHEME WASHINGTON, D.C. -- A federal grand jury in Uniondale, New York, today charged four men with conspiring to defraud the United States and failing to pay taxes in connection with a $17 million gasoline excise tax fraud scheme, the Justice Department announced. Loretta C. Argrett, head of the Department's Tax Division, said that Gregory Goldenberg, Garry Braverman, Igor Glazer, and Paul Krauss, each were charged with one count of conspiracy to defraud the United States and 12 counts of tax evasion. "Non-compliance in the gasoline tax area has cost American taxpayers hundreds of millions of dollars in uncollected excise taxes." "The Tax Division is committed to prosecuting perpetrators of these financial crimes on the American public to the fullest extent of the law," Argrett commented. According to the indictment, the four evaded paying approximately $17 million in gasoline excise taxes from early 1990 through December 1991. During that time, the four controlled a group of sham wholesale gasoline distributors which operated in the New York metropolitan area. As part of the scheme, the four defendants set up a bogus company called Petro Sourge as a registered wholesale company. Using a fraudulent registration certificate for Petro Sourge, the defendants sold more than 133 million gallons of gasoline on which no excise tax was ever paid, the indictment said. Registered wholesale companies are not required to pay excise taxes if they sell gas to another registered company, but they are required to pay the IRS federal excise taxes for each gallon of gasoline sold to an unregistered company or removed from a gasoline terminal. In addition, the defendants allegedly prepared fake invoices showing that excise taxes had been paid on gasoline sold to a number of other companies controlled by the defendants as well as to other unrelated companies. The Criminal Investigative and Examination Divisions of the IRS conducted the investigation. The case is being handled by Trial Attorneys from the Department of Justice's Tax Division, Barry Jonas and Corey J. Smith. The defendants face a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge. Each tax evasion count carries a maximum penalty of five years and a $100,000 fine. # # # 97-035