DA Vance: Real Estate Developer, Companies Plead Guilty to Felony Tax Fraud


April 26, 2018

Manhattan District Attorney Cyrus R. Vance, Jr. today announced the guilty plea of MICHAEL SHVO, 45, a real estate developer, and his companies, SHVO ART LTD. and SEREN LLC, for evading the payment of more than $1 million in state and local sales and use tax on purchases of fine art, furniture, jewelry, and a luxury sports vehicle. SHVO pleaded guilty in New York State Supreme Court to Criminal Tax Fraud in the Second and Third Degrees, and is expected to be sentenced on June 7, 2018. SHVO ART LTD. and SEREN LLC also pleaded guilty to one count each of Criminal Tax Fraud in the Second and Third Degrees, respectively; each was sentenced to a $10,000 fine.

“Michael Shvo’s brand of tax evasion was an art form unto itself,” said District Attorney Vance. “Through ornate ruses—like creating a sham Montana corporation to avoid taxes on a Ferrari—the defendant dodged more than a million dollars in state and local taxes. I thank our Office’s prosecutors and our colleagues at the New York State Department of Taxation and Finance and New York City Department of Finance for their work to hold him accountable and return this badly-needed revenue to our City and State.”

As admitted in the defendant’s guilty plea and according to documents filed in court, between 2010 and 2016, SHVO evaded payment of state and local sales and use tax on purchases of fine art, furniture, and jewelry. While in communication with various auction houses and art galleries, the defendant and his company, SHVO ART LTD., made false representations that purchases would be shipped to an out-of-state address in the Cayman Islands or other overseas locations, and consequently, no sales tax was collected. In fact, SHVO’s purchases were sent to his local office or residences, including an apartment on Columbus Circle in Manhattan and a house in the Hamptons.

SHVO also used another company, SEREN LLC, to sidestep payment of New York State and local use tax on a luxury sports car, a 458 Ferrari Spider, purchased by SHVO. SHVO set up SEREN LLC in Montana, then titled and registered the Ferrari in the out-of-state company’s name to evade use tax. In fact, SEREN LLC had no legitimate business purpose except for ownership of SHVO’s Ferrari, and the vehicle itself was used by SHVO in New York and Water Mill.

In total, SHVO evaded the payment of more than $1,000,000 in New York State and local sales and use tax.

The Manhattan District Attorney’s Office’s Asset Forfeiture Unit also filed civil papers against the defendant and his companies seeking the forfeiture of funds gained through the alleged crimes. In connection with its civil action, the Manhattan District Attorney’s Office secured a temporary restraining order restraining approximately $1.5 million of the defendant’s assets. These assets have now been forfeited and will be used toward satisfaction of the $3.5 million in taxes, penalties and interest that the defendant must pay in connection with his criminal plea.

Assistant D.A. Lisa M. White and Assistant D.A. Emily Bradford handled the prosecution of the case under the supervision of Assistant D.A. Raymond Castello, Counsel to the Investigation Division, Assistant D.A. Anne Ternes, Deputy Chief of the Financial Frauds Bureau, Assistant D.A. Archana Rao, Chief of the Financial Frauds Bureau, Assistant D.A. Judy Salwen, Principal Deputy Chief of the Rackets Bureau, Assistant D.A. Jodie Kane, Chief of the Rackets Bureau, and Executive Assistant D.A. Michael Sachs, Chief of the Investigation Division. Assistant D.A. Madeleine Guilmain handled the asset forfeiture case under the supervision of Assistant D.A. Lynn Goodman, Chief of the Asset Forfeiture Unit. Investigator Anthony DiCaprio, under the supervision of Deputy Chief Investigator Jonathan Reid and Assistant Chief Investigator Michael Wigdor assisted with the investigation.

Computer Forensics Analyst Ryan Lawrence, working under the supervision of Steven Moran, Director of the High Tech Analysis Unit; Assistant D.A. Shannon Goldberg and the members of the Privilege Review Unit; Senior Computer Forensics Analyst Avram Lansky; Principal Investigator Chris-Ann Fenty, of the Forensic Accounting and Financial Investigations Bureau, working under the supervision of Irene Serrapica, Deputy Chief of the Forensic Accounting and Financial Investigations Bureau, and Robert Demarest, Chief of the Forensic Accounting and Financial Investigations Bureau; Paralegal Daniel Elkind; and former Investigative Analysts Quinn Cronan and Victor Hollenberg also provided valuable assistance with the investigation.

District Attorney Vance also thanked the New York State Department of Taxation & Finance and the New York City Department of Finance for their cooperation and assistance with the investigation

Defendant Information:

MICHAEL SHVO, D.O.B. 12/29/72
New York, NY

Convicted:

  • Criminal Tax Fraud in the Second Degree, a class C felony, 1 count
  • Criminal Tax Fraud in the Third Degree, a class D felony, 1 count

SHVO ART LTD.
Grand Cayman, Cayman Islands

Convicted:

  • Criminal Tax Fraud in the Second Degree, a class C felony, 1 count

Sentenced:

  • $10,000 fine

SEREN LLC
Missoula, MT

Convicted:

  • Criminal Tax Fraud in the Third Degree, a class D felony, 1 count

Sentenced:

  • $10,000 fine