A.G. Schneiderman And Acting Tax Commissioner Manion Announce Arrest And Indictment Of Former Steuben County Restaurant Owners For Allegedly Pocketing Over $175K In Sales Tax
Christopher And Kimberlee Klee, Owners Of Sonora’s Mexican Restaurants In Bath and Corning, Allegedly Failed To Remit Over $175K In Collected Sales Tax
Schneiderman: Those Who Defraud The Tax System Will Be Fully Prosecuted
Attorney General Eric T. Schneiderman and Acting Commissioner of Taxation and Finance Nonie Manion announced the arrests of Christopher and Kimberlee Klee, following the unsealing of an indictment charging the Klees for their failure to file sales tax returns and remit over $175,000 in sales tax collected at two Sonora’s Mexican Restaurant locations in Bath and Corning.
A Steuben County Grand Jury handed up a seven-count indictment in which Christopher and Kimberlee Kimberlee Klee were each charged with one count of Grand Larceny in the Second Degree, a Class C felony, in violation of Penal Law §155.40(1) and three counts of Criminal Tax Fraud in the Third Degree, a class D felony, in violation of Tax Law § 1804 for failing to file sales tax returns and remit collected sales tax from sales at the Sonora’s Mexican Restaurant located in Bath. In addition, the Klees were each charged with one count of Grand Larceny in the Third Degree, a Class D felony, in violation of Penal Law §155.35(1) and two counts of Criminal Tax Fraud in the Third Degree for failing to file sales tax returns and remit collected sales tax for sales at the Sonora’s Mexican Restaurant located in Corning.
“Pocketing sales tax shows a blatant disrespect for the patrons who spend their hard-earned money at these restaurants,” saidAttorney General Schneiderman. “We will keep working to root out and prosecute those who seek to defraud the tax system.”
These charges were the result of an investigation conducted by the Department of Taxation and Finance’s Criminal Investigations Division, and then referred to the Attorney General’s Office for further investigation and prosecution.
“Business owners who fail to remit the sales tax they collect from customers, as alleged in this case, are not only depriving the state of revenue used for vital services, but also stealing from the communities where they operate,” saidActing Commissioner of Taxation and Finance Manion. “We’ll continue to work with Attorney General Schneiderman and all levels of law enforcement to bring those who commit these crimes to justice.”
According to the indictment and statements made by the prosecutor at arraignment, Christopher, 55, and Kimberlee Klee, 53, both of Elmira, were the owners and operators of several Sonora’s Mexican Restaurants, including locations in Bath and Corning.
The Bath restaurant, located at 330 W. Morris Street, opened for business in September 2004. The Klees, who must file sales tax returns and remit collected sales tax quarterly, allegedly failed to file sales tax returns for the time period from September 1, 2006 through August 1, 2011, the day on which the restaurant closed. An audit conducted by the Department of Taxation and Finance revealed that during this time period, the Bath restaurant made over $1,850,000 in total sales and collected over $140,000 in sales tax which the Klees allegedly failed to remit to New York State.
The Corning restaurant, located at 84 E. Market Street, opened for business in February 2010 and remained in operation until November 2011. An audit by Department of Taxation and Finance revealed that between during this time, the Corning restaurant made over $480,000 in total sales, and the Klees allegedly failed to remit over $38,000 in collected sales tax.
The Honorable Peter C. Bradstreet arraigned Christopher and Kimberlee Klee today in Steuben County Court. The Klees are next scheduled to appear in court on April 3, 2017. If convicted of the top count charged of Grand Larceny in the Second Degree, Christopher and Kimberlee Klee each face up to 5 to 15 years in prison.
The charges against Christopher and Kimberlee Klee are merely accusations and they are presumed innocent until proven guilty in a court of law.
The Attorney General thanks the New York State Department of Taxation and Finance for their assistance in this investigation.
Also assisting in the investigation was Investigator Joel Cordone and Supervising Investigator Richard Doyle of the New York State Office of the Attorney General under the supervision of Deputy Chief Investigator Antoine Karam. The Attorney General’s Investigations Division is led by Chief Dominick Zarrella.
The case is being prosecuted by Assistant Attorney General Andrew Tarkowski of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Acting Bureau Chief Stephanie Swenton.