New Jersey Attorney General Peter Harvey announced that an insurance fraud investigation by the Division of Criminal Justice – Office of Insurance Fraud Prosecutor and the Division of Taxation has resulted in the indictment of a California chiropractor and his sister who resides in New Jersey on charges they cheated the State of New Jersey out of more than $117,000 in business and income taxes. The State Grand Jury indictment charges the pair with multiple counts of conspiracy to commit corporate and New Jersey State income tax violations.
Joining Attorney General Harvey and State Treasurer John McCormac in announcing the State Grand Jury indictment were Vaughn McKoy, director, Division of Criminal Justice, Insurance Fraud Prosecutor Greta Gooden Brown and Robert Thompson, director, Division of Taxation. The state officials credited the joint investigation conducted by the Division of Taxation’s Office of Criminal Investigations and the Division of Criminal Justice – Office of Insurance Fraud Prosecutor with unraveling a complicated conspiracy designed to avoid paying thousands of dollars in New Jersey corporate business and income taxes.
Criminal Justice Director McKoy said the State Grand Jury returned an 18-count indictment against Richard J. Nardone, 45, San Diego, Calif. and Nardone’s sister, Donna M. Januik, 51, of Union County.
Nardone, a New Jersey-licensed chiropractor, was charged with conspiracy, filing false and fraudulent New Jersey Income Tax returns, filing false and fraudulent New Jersey Corporate Tax returns, failure to pay New Jersey Gross Income Tax with intent to evade, and misconduct by a corporate official. Januik was charged with conspiracy, filing false and fraudulent New Jersey Income Tax returns, filing false and fraudulent New Jersey Corporate Tax returns, and failure to pay New Jersey Gross Income Tax with intent to evade. All charges are third degree violations which carry a maximum penalty of up to five years in state prison and a fine of up to $15,000 per count. Additionally, the Division of Taxation will move to recoup the due and owing tax monies.
The State Grand Jury indictment alleges that between Jan. 1, 1998 and May 31, 1999, Nardone and Januik, in order to avoid paying New Jersey corporate business and income taxes, transferred and withdrew large sums of money from Nardone’s chiropractic business and from related medical treatment, diagnostic, or rehabilitation facilities owned, operated and controlled by Nardone.
Thereafter, it is alleged that Nardone and Januik created three fictitious employees identified as Brian Taylor, Jeanne Pierre and Mark Wallace. It is charged that Nardone and Januik issued at least 144 corporate checks exceeding $400,000 to the fictitious employees. The indictment alleges that Nardone then instructed an employee to endorse and cash the checks at an unlicenced check cashing business in Irvington. The employee then returned the cash to Nardone. Additionally, it is alleged that Nardone and Januik utilized corporate accounts to pay for more than $180,000 in personal expenses without reporting the funds as income.
The investigation identified the location of Nardone’s chiropractic office as 150 Main St., Orange, Essex County. Nardone’s related businesses are identified as: Professional Medical Technologies, Inc. (PMT), located in Mountainside, Union County; Camino Rehabilitation, Inc., located at 765 Mountain Ave., Springfield, Union County; Hermosa Medical Services, Inc., in Mountainside; Advanced Diagnostic, Inc., located at 68a Woodside Gardens, Roselle Park, Union County; and Medical Diagnostic, Inc., located in Mountainside. It is alleged that Januik operated a billing and collection agency known as ZNS Billing.
During the course of the investigation, Division of Criminal Justice – Office of Insurance Fraud Prosecutor and Division of Taxation investigators seized financial books and records relating to the case. Shortly thereafter, the chiropractic practice and the related businesses ceased operations.
The indictment was handed up to Mercer County Superior Court Judge Maria Marinari Sypek on Feb. 10. The case will be assigned to the Union County Superior Court for trial. Nardone and Januik will be issued a complaint summons and will be required to appear in court for arraignment and bail. The investigation continues.
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