FOR IMMEDIATE RELEASE
Monday, June 15, 1998
Contact: Jeff Nelligan
Telephone: (202) 366-6312
OIG 17-98
Transportation’s
Inspector General Announces
Sentencing in Gasoline Tax Evasion Case
The U.S. Department of Transportation’s Office of Inspector General today announced that Arkady Shuster of Brooklyn, N.Y., was sentenced in federal court for his part in a conspiracy to defraud the U.S. government out of more than $3 million in motor fuel excise taxes.
Shuster was sentenced to 37 months in federal prison, followed by 36 months of supervised release. He was also fined $50,000.
Shuster participated in a large-scale gasoline-tax evasion conspiracy. The overall scheme involved the evasion of over $3 million in excise taxes on the sale of approximately 45 million gallons of gasoline sold in 1989. Shuster facilitated the evasion scheme by operating a "shell" company called LNS Futures & Options, Inc.
Shuster, indicted in November 1992, fled the country and was a fugitive until he re-entered the United States in February 1997. On March 17, 1997, in U.S. District Court in Hauppauge, Long Island, he pleaded guilty to two counts of conspiracy, two counts of tax evasion and one count of false use of an Internal Revenue Service form used to register tax-free transactions.
The prosecution was a result of an investigation by special agents from DOT’s Office of Inspector General, the Internal Revenue Service’s Criminal Investigations Division, the New York State Department of Finance and Tax Evasion and members of the Long Island Motor Fuel Tax Evasion Task Force, and revenue agents of the IRS’ Examination Division.
###