Carlson Receives Sentence - post-journal.com | News, Sports, Jobs, Community Information - Jamestown | Post-Journal

Carlson Receives Sentence - post-journal.com | News, Sports, Jobs, Community Information - Jamestown | Post-Journal
Carlson Receives Sentence
Area Restaurateur To Serve Between 1 1/2 To 4 1/2 Years In Prison

May 7, 2011
By Sharon Turano sturano@post-journal.com , The Post-Journal
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MAYVILLE - Despite apologizing in State Supreme Court on Friday, restaurateur Steve Carlson, 52, Jamestown, was sentenced to between 1 1/2 and 4 1/2 years prison.

The sentence came one day after he was sentenced in federal court to 46 months in prison on federal charges of tax and mortgage fraud. The sentences will run concurrently. Although he was uncertain where Carlson will serve the time, Defense Attorney Paul Cambria said Carlson will serve in federal custody, likely in McKean County, Pa.

Carlson was sentenced Friday on second-degree grand larceny charges for allegedly failing to pay sales taxes he collected at area restaurants. He pleaded guilty to the charge. The attorney general's office reported he operated the establishments in Bemus Point, Fredonia and Jamestown from March 1, 2005, to Aug. 31, 2008, but allegedly did not pay sales tax receipts totalling $430,000. Investigators said he allegedly collected $654,900 in sales tax from customers but paid only $224,100 to the state.

The sentence was not handed down before Carlson apologized, however, and Judge Richard C. Kloch Sr. had his say, as did both prosecuting and defense attorneys.

Paul McCarthy of the state Attorney General's office said the crimes were not "victimless," but rather resulted in money being taken from the state and Chautauqua County that would have otherwise been used to benefit them. Instead, he said, Carlson's generosity, evidenced in letters written to the court, was "wasted" as funds that would have benefitted others went into his own pocket.

Cambria said Carlson, however, has taken full responsibility, adding running a restaurant is almost like gambling with an owner thinking they can make a bad day better and eventually falling into the hole Carlson did, for which he then apologized.

Kloch said he, too, is uncertain how small business owners can make it in New York state, adding there are regulations, roadblocks and taxes with which to contend, something he likened to having to "scurry bullets" in order to keep doors open. He said, however, the majority of business owners do so.

"It was never your money," he told Carlson, adding other people transmit taxes to the state. Despite that, he told Carlson he is not a bad person, nor are most who come before him. Rather, the judge said, he often sees people trying to make a go when things go bad.

"There's going to come a day ... you are going to come out," he told Carlson. "It's going to be over," he said, telling Carlson when that happens he can no longer take shortcuts in his pursuit of making a go in business. In addition to the prison term, Carlson was ordered to pay $430,000 state restitution Friday. On Thursday, he was ordered to pay $391,972 in restitution to the Internal Revenue Service and $599,086 to the EverBank of Florida during the federal proceedings.

Cambria said the defense is glad the chapter is complete.

Handling the federal case was Assistant U.S. Attorney Gretchen L. Wylegala, who said Carlson evaded paying federal taxes from 2001 to 2008 by allegedly putting businesses and properties in names of others, rather than his own, hiding assets the government could otherwise use to satisfy taxes owed. Included were properties in Florida, one of which involved a multi-million dollar loan for which Carlson was required to provide proof of income to the bank. The attorney generals' office said supporting documents allegedly included falsified tax returns, financial statements and a social security number. The loan failed, with a loss of at least $600,000.

The federal court finalized the forfeiture of $2 million.