July 2004

Massachusetts Scrap Dealer Pleads Guilty to Tax Fraud

Boston, MA— A Chelsea, Massachusetts scrap metal dealer pleaded guilty in federal court to conspiring with customers to assist them in evading taxes.

United States Attorney Michael J. Sullivan and Joseph A. Galasso, special agent in charge of the U.S. Internal Revenue Service, Criminal Investigation, announced that Yale Strogoff of Swampscott, Massachusetts, pleaded guilty before U.S. District Judge Rya W. Zobel to conspiring to defraud the United States by impairing and impeding the IRS in connection with the administration of the income tax laws.

At this plea hearing, the prosecutor told the court that, had the case proceeded to trial, the evidence would have proven that Mr. Strogoff, as president and owner of S. Strogoff & Co., Inc., a Chelsea, Massachusetts scrap metal dealer, conspired with certain customers from at least the late 1980’s until December, 1998 to pay those customers with checks made payable to fictitious payees for scrap metal sold to S. Strogoff & Co. Strogoff arranged with the bank on which the checks were drawn for the bank to cash the checks made payable to fictitious payees without requiring the customer to show any identification. The S. Strogoff & Co. customers were not declaring the money received on the books and records of their corporations, which had sold the metal, and were keeping the money and using it for personal purposes; nor were they declaring the money on their personal income tax returns.

Judge Zobel scheduled sentencing for August 10, 2004 at 2:00 p.m. Mr. Strogoff faces a maximum sentence of 5 years of incarceration, to be followed by 3 years of supervised release, and a fine of $250,000.

The U.S. Internal Revenue Service, Criminal Investigation, investigated the case. Assistant U.S. Attorney Peter A. Mullin in Sullivan’s Economic Crimes Unit is prosecuting it.