DISTRICT ATTORNEY - NEW YORK COUNTY

NEWS RELEASE
January 22, 2008

Contact: Jennifer Kushner
212-335-9400

Manhattan District Attorney Robert M. Morgenthau announced today that a Manhattan supermarket pleaded guilty to underreporting its gross receipts. As a result of the plea, the defendant was also sentenced today and paid a $10,000 criminal fine. In addition, the defendant and seven associated supermarkets will pay $876,361 in evaded taxes, interest and penalties.

The investigation involved the TEM FOOD CORP, located at 42 Avenue C, in New York County, and seven other related New York City supermarkets that operated under the umbrella group, Fine Fare Foods Supermarkets. TEM FOOD CORP pleaded guilty to one felony count of Offering a False Instrument for Filing in the First Degree and one misdemeanor count of Failure to File a Return or Report; Supply Information; or Supplying False Information; Utility Tax, Corporate or Unincorporated Business Taxes.

A comparison of the bank deposits to the gross receipts reported on the sales tax returns filed with tax authorities revealed that six of the eight corporations underreported their gross receipts by an aggregate of $37.1 million, of which 13% represented transactions that included collected sales tax. As a result, six of the eight corporations failed to report a total of $375,837.94 in collected sales tax over a five-year period (December 1, 1999 to November 30, 2005). In addition, six of the eight corporations failed to pay New York City general corporation tax, interest and penalties for the years 2002 through 2005.

For their participation in the investigation, Mr. Morgenthau thanked the New York City Department of Finance, Commissioner Martha Stark, Assistant Commissioner, Tax Enforcement, Carlton Butler, Director of Tax Enforcement Maureen Kokeas, Audit Group Chiefs Hamdi Fattah and Michael Schenk, Auditors Anthony Folkes, Carol Hackett, Helen Yuen, Gary Wong and Eva Faltas, and Investigator Vernon Edwards.

Mr. Morgenthau also thanked Acting Commissioner Barbara Billet of the New York State Department of Taxation and Finance and her staff.

The case was handled by Assistant District Attorney Maurice Mathis, under the supervision of Assistant District Attorney Gilda I. Mariani, Chief of the Money Laundering and Tax Crimes Unit and assisted by Chief Financial Investigator Robert Demarest.

Mr. Morgenthau also thanked the New York City Police Department and Commissioner Raymond Kelly and District Attorney Squad Commander Captain Joseph Finn and Detective Gerard Quinn.

Defendant’s Information:

TEM FOOD CORP,
42 Avenue C
New York, New York