QUEENS, N.Y. -- The five business partners who operate New York Rent-A-Car, one of the largest independent rental companies in New York, have been charged in a $7.9 million tax evasion scheme.
Police arrested the five men -- Leonard Brown, Yuval Havatzelet, Paolo Nardi, David Ourian and Elliot Zolin -- on Nov. 26. They are charged with filing 88 false state sales tax returns between 1995 and 2002. They are also charged with rolling back the odometers of fleet cars before remarketing them, said Queens District Attorney Richard A. Brown.
The arrests followed an extensive investigation, begun in early 2000, that involved New York's State Taxation and Finance Department, Tax Enforcement Office, Department of Motor Vehicles, the Queens District Attorney's Office and detectives from the D.A.'s New York City Police Department Squad.
Brown said the investigation was launched after the DMV became aware of inconsistencies while processing title and registration documents for the company. Investigators gathered considerable evidence during 19 separate raids on Oct. 1, when they seized computers and business records from the offices and homes of New York Rent-A-Car's principals.
The D.A.'s office alleged that the business records, along with tax returns, revealed that the rental company paid just $3.8 million in sales taxes between March 1, 1995 and June 30, 2002 -- $7.9 million short of what the company owed on its revenue of $88.4 million for the period.
Prosecutors also alleged that in just a two-month period, between June and August 2002, New York Rent-A-Car rolled back the odometers on more than 90 fleet vehicles. Further, they said, some reductions exceeded 50,000 miles.
"We will seek to identify the purchasers of the company's fleet cars, most of which were sold at used car auctions, and to obtain restitution for them," Brown said.
Brown added that prosecutors have already frozen more than $3 million of the company's assets.