TWO SENTENCED TO PRISON FOR TAX VIOLATIONS

Boston, MA... A Cohasset man, formerly of Newton, and a Waltham man were each sentenced to prison terms today in federal court for conspiring to defraud the United States by engaging in a scheme to divert income from their businesses to their personal benefit without reporting that income to the Internal Revenue Service. The Cohasset man also was also sentenced for evasion of taxes, and the Waltham man for filing a false tax return.

United States Attorney Michael J. Sullivan and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - New England Field Division and Douglas A. Bricker, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation - Boston Field Office announced today that JOSEPH A. YERARDI, age 45, of 91 Nichols Rd., Cohasset (formerly of 338 Langley Road, Newton) and JOHN J. TOYIAS, age 42, of 15 King’s Way, Waltham, were sentenced today.

YERARDI was sentenced to 30 months in prison, to be followed by three years of supervised release. YERARDI was also ordered to pay restitution of $454,639 and a $6,000 fine. TOYIAS received a lesser sentence of a year and a day in prison because of his cooperation against YERARDI. The Court ordered TOYIAS to pay restitution of $115,093 and a fine of $5,000 and to be on three years of supervised release.

At their plea hearing in September, the prosecutor told the Court that had the case proceeded to trial, the government’s evidence would have proven that YERARDI and TOYIAS conspired to divert proceeds from their respective businesses to several sham bank accounts, which they then used to pay themselves and their employees without reporting the income to the IRS. In some instances, TOYIAS created fictitious invoices to make it appear that the payments to the hidden bank accounts were for legitimate business purposes. According to the prosecutor, YERARDI and TOYIAS diverted at least $1.4 million to themselves and their employees through the hidden bank accounts. The prosecutor stated that YERARDI separately committed tax evasion for the year 2002 by, among other things, failing to file a tax return, failing to pay taxes of more than $180,000 on income of more than $650,000, and diverting business income to his own and his wife’s personal bank accounts. Combining the diversion carried out with TOYIAS and his own separate diversion of income, for the years 2000-2004, YERARDI failed to report over $1.6 million in taxable income, thus avoiding the payment of over $450,000 in federal taxes. According to the prosecutor, TOYIAS filed a false tax return for tax year 2000 which understated his total taxable income by over $100,000.

The case was investigated by the Federal Bureau of Investigation - New England Field Division and the Internal Revenue Service, Criminal Investigation - Boston Field Office. It is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Sullivan’s Economic Crimes Unit.