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GLEN FALLS, N.Y. -- A case filed by the U.S. Attorney's Office against the family that owns the USA Gas chain of gas stations and convenience stores, alleging that they avoided taxes by "structuring" deposits, is set to go to trial this month, The Post-Star reported.
The company reportedly made $17 million in cash deposits alone in bank accounts between October 1999 and July 2003. However, all but three of the business' hundreds of bank deposits were made in amounts below $10,000 -- the threshold at which banks have to report deposits to the federal governments, according to court records cited by the newspaper.
According to a case statement filed by the U.S. attorney's office against the company's owners, 81 percent of those deposits were for amounts between $9,000 and $9,995. Prosecutors believe that is the crime of "structuring," deliberately making deposits of less than $10,000 to avoid federal scrutiny, The Post-Star said.
"The benefit defendants sought to obtain was to conceal the nature of their business operations from the IRS and to avoid paying the true amount of tax owed," Assistant U.S. Attorney Elizabeth Coombe wrote in a trial memorandum filed Oct. 16. "All of the corporations engaged in a remarkable pattern of structuring."
The structuring allegations are among a host of federal crimes the company's proprietors -- four members of the Ozbay family of Saratoga Springs and Schenectady, N.Y. -- are charged with in a case that is to go to trial before U.S. District Judge Gary Sharpe beginning Oct. 30.
Also included in the 47-count indictment against Mustafa Ozbay, Ziya Ozbay, Yalcin Ozbay and Birol Ozbay are allegations that their six corporations illegally paid employees "off the books," failed to file tax returns or filed inaccurate returns and paid suppliers in cash without noting those payments on their returns. "For example, in 1999, defendants made cash payments of almost $200,000 to just two suppliers," Coombe wrote.
Despite the millions of dollars flowing through their bank accounts, the Ozbays didn't file tax returns some years, or filed returns with income levels so low they had no taxable income, according to federal court documents obtained by The Post-Star.
Yalcin Ozbay's corporate tax return in 2002 for U.S. Mart Inc. was singled out since he claimed $16,081 in income, while prosecutors believe the company had $400,000 in revenues during November and December of that year alone, the newspaper reported.
Mustafa Ozbay, 58, and Ziya Ozbay, 60, are brothers. Yalcin Ozbay, 39, is Ziya's son-in-law, while Birol Ozbay, 30, is Mustafa's son. They are all immigrants from Turkey. The family also runs a gas station in Ballston Spa and ran one on Upper Glen Street in Queensbury in recent years.
Coombe said the four could face up to 10 years in federal prison and a $500,000 fine if convicted of the structuring charges. In addition, the Ozbays face potential forfeiture of three pieces of property that prosecutors believe were the proceeds of their crimes. Ziya Ozbay has already agreed to forfeit a piece of property on Route 67 in Ballston Spa, court records show. It was unclear whether that property was home to a gas station, the newspaper said.
The government also is seeking to seize six bank accounts containing $275,616 and four 2003 Mercedes Benz automobiles, according to court records. In addition, $80,000 has been seized that was found in Yalcin Ozbay's Mercedes Benz the day of his arrest.
All four were arrested on Nov. 3, 2004, when federal agents raided their stations simultaneously, shutting them down for several hours as documents were seized. The men have since been freed on bail. Ziya Ozbay's lawyer, Kevin Luibrand, would not discuss the case. Lawyers for the three others did not return phone calls for comment by The Post-Star.