The New Jersey Attorney General's office has handed down an eight-count indictment against a former executive with a now-defunct tire and auto repair business, charging that he allegedly cheated the state out of more than $1.2 million in sales and employee withholding taxes.
Peter C. Harvey, New Jersey's first assistant attorney general and director of the Division of Criminal Justice, returned the indictment against John Tredy, 55, of Ringwood, N.J. He was former controller for T & S Tire Service Corp., a retail tire sales and auto repair business that did business as Bergen Tire and had retail shops in Carlstadt and Wayne, N.J.
Following the death in 1999 of the dealership's owner, Anthony Tramontozzi, family members sold one outlet, and another was subsequently taken over by Goodyear. A relative of Mr. Tramontozzi told Tire Business that at one time there were at least 12 outlets in the state that went by the name Bergen Tire, but all were not operated by the same company and that a number of Bergen Tire locations still exist.
The indictment charges that between June 1994 and August 2000, Mr. Tredy collected and failed to turn over to the state a total of almost $1.1 million in sales taxes and $101,000 in employee withholding taxes. As a result of these alleged actions, Bergen Tire paid no state sales or employee withholding taxes during the six-year period, even though the funds were collected.
Additionally, a state grand jury charged in the indictments that, from December 1999 through August 2000, Mr. Tredy ``engaged in other acts of theft, including a scheme in which he allegedly obtained more than $300,000 by double-billing scores of Bergen Tire customers by using credit card numbers to double-bill credit companies for services purchased from the dealership's retail stores.
According to a press release from the attorney general's office, an investigation determined that Mr. Tramontozzi's privately held dealership ``had entrusted Mr. Tredy with complete financial control of the company'' and had no knowledge of the alleged theft of tax revenues.
A source close to the case told Tire Business that upon Mr. Tramontozzi's death his wife Susan became owner of the business. Company officials inspecting its books found a number of discrepancies, the source said, eventually discharged Mr. Tredy-who had been with the company more than 20 years-once the allegations came to light and cooperated with the state's probe.
A joint investigation by the state's Division of Criminal Justice and Division of Taxation determined that Mr. Tredy enlisted the cooperation of Kevin Dolan, 33, in his alleged scheme to defraud the state.
A tax investigator with the Division of Taxation, Mr. Dolan was charged with official misconduct on June 25 for receiving from Mr. Tredy nearly $10,000 in gifts that included football tickets and free repair services, the attorney general said. He covered his actions, officials said, by manipulating the state's computer system to hide the tax evasion.
Mr. Dolan, who no longer works for the state, pled guilty on June 25 before a Bergen County Superior Court judge.
The attorney general said Mr. Dolan has cooperated with authorities, and his sentencing has been postponed, at the state's request, pending his testimony against Mr. Tredy at trial.
If convicted on all counts, Mr. Tredy could face up to 60 years in state prison and fines of up to $660,000, plus restitution to the state for tax revenues owed.
In the aftermath of the indictment of Mr. Tredy, New Jersey Attorney General David Samson and Treasurer John E. McCormac in October signed an agreement they said would streamline procedures for joint investigations of tax fraud by the Division of Taxation and the Division of Criminal Justice.
Mr. Samson, in a prepared statement, said the shared goal of the divisions ``is the investigation, arrest and prosecution of tax cheats who steal'' from the state and all New Jerseyans, and he vowed ``to move tax fraud cases to the front burner....'' Mr. McCormac noted that ``citizens who play by the rules cannot and will not be forced to shoulder the burden of tax cheats who evade the system....''