Manhattan District Attorney Robert M. Morgenthau announced today that a 48-year-old Israeli businessman has pleaded guilty to stealing $1,387,743 by collecting sales tax and failing to remit the money to New York State.

The defendant, RAZIEL OFER, pleaded guilty to Grand Larceny in the First Degree.  As a result of his plea, the defendant will accept an open plea exposing him to a mandatory minimum of 1 to 3 years and a maximum of 8 1/3 to 25 years in prison if he does not comply with all terms and conditions of the plea agreement, which includes the repayment of $1,887,743 in sales tax, accrued interest, and penalties.  However, if OFER complies he will be given the opportunity to plead guilty to a lesser included crime which can result in a lesser sentence.

OFER is the owner of an internet hotel business operating under the name Global Hotels, Inc. (successor to Woogo NY LP) with offices at 240 West 73rd Street.  OFER provided short term stays in apartments and hotel rooms to travelers visiting Manhattan at various locations including: 240 West 73rd Street (Central Park Hotel/Tempo); 301 West 53rd Street (Encore Hotel), 244 West 64th Street (Lincoln Center Hotel), 50 W 34TH Street (Herald Towers), 209 W. 87th Street (the Belnord), 306 West 94th Street (the Devon Hotel) and 307 W. 79th Street (the Imperial Court).

The investigation leading to today’s plea revealed that OFER collected the required sales tax, which he reported in his monthly sales tax returns from January 1, 2006 to March 31, 2008.  Generally, OFER made only nominal payments to the New York State Department of Taxation and Finance (“State Tax”) even though OFER knew he was obligated to turn over all sales tax collected to the State.  When auditors from State Tax contacted the defendant about his failure to pay the entire tax due, he changed the name of his company and, for a few months, paid the appropriate tax due.  Then, the defendant returned to his prior practice of bouncing checks or paying nominal amounts.

Mr. Morgenthau said, “This case illustrates how an international entrepreneur can operate a lucrative Manhattan business without shouldering any of the tax burdens.  New York needs every tax dollar it is owed and it is important that prosecutors seek to recover every dollar that is evaded.”

OFER was released on his own recognizance on the condition that he surrenders his Israeli passports and place $500,000 in his attorney’s escrow account by July 31, 2008. He is scheduled to appear in court on December 12, 2008 to determine whether he is in compliance with today’s plea agreement.

Mr. Morgenthau thanked New York State Department of Taxation and Finance Commissioner Robert L. Megna, Deputy Commissioner William Comiskey, Managing Tax Auditor Stan Milstein, Tax Auditor David Simmons, Tax Auditor Elaine Sullivan, and Field Audit Specialist Frank Hernandez. Mr. Morgenthau also thanked the Manhattan District Attorney’s Office Detective Squad supervised by Capt. Joseph Finn for its assistance in the investigation, particularly Detective Robert Mistretta.

This case was jointly handled by Assistant District Attorney Maurice Mathis and Assistant District Attorney Gilda Mariani, Chief of the Money Laundering and Tax Crimes Unit. Chief Financial Investigator Robert Demarest, Senior Investigative Accountant Michael Lentini, and Senior Forensic Computer Analyst Avram Lansky of the Money Laundering and Tax Crimes Unit also assisted.

 

Defendant Information

RAZIEL OFER, 10/16/59
240 W. 73rd St
New York, New York

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