Local man in New York custody over $17 million fraud

Local man in New York custody over $17 million fraud

6 January 2016

A DOWNPATRICK man charged with involvement in an alleged US multi-million pound tax-dodging scheme has been remanded in custody in New York.

Paul Feenan (48) was arrested along with a Bronx pub owner, Thomas Keenan, and a New Jersey pawn shop owner, Ian Woloshin.

The trio are accused of running a massive illegal cheque-cashing ring that helped New York Port Authority contractors avoid paying tax. It was alleged run out of a bar owned by Keenan.

Manhattan prosecutors accuse them of illegally cashing nearly $17 million in cheques for at least 19 businesses between 2012 and 2014.

Criminal and civil court papers claim the associates made nearly $1m from the scheme by taking a five per cent commission on each illegally cashed cheque.

The charges follow a joint probe by the Manhattan District Attorney’s Office and the Port Authority into contractors underreporting payroll.

An affidavit said investigators from the Port Authority, working with the New York County District Attorney’s Office, “identified various businesses that were cashing third-party cheques and paying their workers in cash in order to underreport payroll and avoid taxes, worker’s compensation insurance premiums and other business expenses”.

Feenan and Keenan were both arraigned on conspiracy, bank fraud charges, felony tax fraud and identity theft charges. Both pleaded not guilty.

Feenan, who is reported to be an illegal immigrant in the United States, was remanded in jail.

Bail for Keenan was set at $50,000.

Prosecutors said the scheme allegedly involved business owners ping off commercial cheques to Keenan or Feenan at Keenan’s bar and other locations including gasoline stations.

It is further alleged that in return the men would hand the owner cash in a paper or plastic bag for the amount of the cheque minus a five percent commission.

Prosecutors claim Keenan and Feenan would endorse the cheques, even though they were not the named recipients.

It is alleged the cheques would be delivered to Woloshin, who would deposit them in a business account connected to his pawn shop, which was a licensed cheque-cashing operation.

According to the papers, on November 11 2013, the owner of a construction company gave Feenan a $149,250 cheque and received $141,787 in cash in exchange.

The documents said the following day a runner picked up the cheque from Keenan and ferried it to Woloshin’s pawn shop and he allegedly deposited the cheque for cash, taking a 1.5 per cent cut and delivering $147,011 in cash to Mr Keenan and Mr Feenan, leaving them with the remaining 3.5 per cent commission.

The three men made at least $838,1000 off the scheme, according to prosecutors.