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May 21, 2019

Hamden deli owner admits evading $220K in taxes

PHOTO | Michelle Tuccitto Sullo Ray & Mike’s Dairy & Deli in Hamden.
By Michelle Tuccitto Sullo

The owner of a popular Hamden delicatessen pleaded guilty Friday to one count of tax evasion, after he allegedly failed to report about $638,173 in income.

Raymond George, 52, of Hamden, who owns and operates Ray & Mike’s Dairy & Deli at 3030 Whitney Ave., waived indictment and entered the plea in a proceeding before U.S. District Judge Stefan R. Underhill in Bridgeport.

The charge carries a maximum penalty of up to five years imprisonment, and a fine of up to approximately $440,000. However, sentencing guidelines, which include credit for acceptance of responsibility, show a likely sentence of between 12 and 18 months of imprisonment and a fine of between $5,500 and $55,000.

According to the U.S. Attorney’s office, George has agreed to pay back taxes of $220,663, plus interest and penalties, to the federal government.

“The defendant willfully and with specific intent, evaded and attempted to evade the payment of federal income taxes that he owed to the United States of America,” federal prosecutors wrote, in a plea agreement document.

George opened the deli in 1997 near the Quinnipiac University campus, and it has been popular with customers from the university and community. It advertises that it is open daily, even on holidays and in bad weather.

George owns 99 percent of the business, while a partner, who was not charged, owns one percent, court documents show. In addition to selling a variety of sandwiches, the business also sells groceries and convenience-store items.

The Internal Revenue Service’s Criminal Investigation Division conducted an audit of George’s 2012 and 2013 tax returns and discovered unreported income in both years. According to the U.S. Attorney’s office, for 2012, George underreported his income by about $365,065 on his federal tax return. For 2013, he failed to report $273,108. By doing so, he didn’t pay about $220,000 in taxes.

Federal investigators claim George took various steps to hide his earnings, including not depositing all of the deli’s cash receipts into his business bank account. George used the business account to pay for his personal expenses. George also deposited about $299,478 in checks from his company’s business account into a personal investment account. He then withdrew $160,000 to buy investment properties in Florida, according to the plea agreement and stipulation of offense conduct.

George also deposited $25,800 from the deli’s lottery account into his personal investment account, according to the U.S. Attorney’s office. None of these funds were reported to the government as income.

Neither George nor his defense attorney, Jeffrey Sklarz of New Haven, responded to requests for comment following the plea.

Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com.

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