Zeytinia Co-Owner Sentenced to Five Years in ‘Massive’ Tax Fraud Scheme
CROTON-ON-HUDSON, N.Y. – Adem Arici was sentenced Monday to five years in prison for his role in withholding more than $50 million in gross receipts from six gourmet food markets, including Zeytinia in Croton-On-Hudson.
Arici, one of nine defendants in the case, was ordered to forfeit $7 million and serve three years of supervised release. He was one of two who had ownership interest in all six markets and was described as one of the leaders of the tax fraud scheme.
“Those who cheat on their taxes impose an unfair burden on everyone else who dutifully pay their fair share,” U.S. Attorney for the Southern District of New York Preet Bharara said. “Adem Arici used the cover of his popular gourmet markets to engage in tax and other fraud. Today, he learned the price he must pay for his crimes.”
Arici, 51, of Easton, Conn., and his co-defendants are accused of underreporting their earnings and understating salaries. In some cases, they didn’t report employee salaries at all, Bharara’s office said in a press release. The owners used the cash they pocketed for their own use, and to pay employees, which Bharara said included undocumented workers.
They kept a second set of books that showed they didn’t report $50 million in receipts between 2004 and 2009.
On June 4 Arici pleaded guilty to conspiracy to commit tax and fraud offenses, four counts of subscribing to false and fraudulent federal personal income tax returns, nine counts of aiding and assisting in the preparation of false and fraudulent federal corporate, partnership, and payroll tax returns.
He is also charged with one count of witness tampering. Arici admitted to counseling someone to lie about a trip to Cuba they took together.
The $50 million that was kept off the books would have equated to $5 million in corporate, payroll and sales taxes. Arici also avoided paying more than $1 million in personal income taxes, according to Bharara’s office.
Co-defendant Jody Vitale was sentenced Sept. 12 to time served followed by two years of supervised release, and ordered to forfeit $354,166. Josefina Caraballo was sentenced Oct. 10 to one year of probation, and ordered to forfeit $41,331. Defendants Omer Ipek and Atilla Yayla are fugitives. All other defendants are awaiting sentencing.
The Internal Revenue Service, Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations helped investigate this case.
Arici had ownership interest and was active in the management of the following gourmet food markets:
Zeytuna, also known as Idaho Farmers Market, Inc., located at 59 Maiden Lane, New York, N.Y.
The Amish Market, also known as Potato Farms LLC, located at 53 Park Place, New York, N.Y.
Zeytinia Gourmet, also known as Forest Market LLC, located at 56 Maple Street, Croton-on-Hudson, N.Y.
Zeytinia Fine Food Store, also known as Oakland Fine Food, Inc., located at 350 Ramapo Valley Road, Oakland, N.J.
Zeytinia Fine Food Store, also known as Zeytinia LLC, located at 2801 Pacific Avenue – Units 203-204, Atlantic City, N.J.
Zeytinia Gourmet Market, also known as Wilton Farms LLC, located at 14 Danbury Road – Suite 11, Wilton, Conn.