CAMDEN – Three people who belong to a decades-old cult that does not believe in paying federal taxes also believe their employees at a Mays Landing construction company and fellow group members should not have to abide by government rules.
Well, the government has a major rule that everyone must abide by – pay your taxes. The trio, charged April 12 with not withholding taxes on almost $700,000 from employee paychecks starting in 1996 and more than $100,000 in under-reported Social Security and Medicare taxes, pleaded not guilty at their arraignments Thursday.
About a dozen fellow cult members from the Restored Israel of Yahweh, or RIOY, a Hamilton Township group, showed up for the 20-minute proceeding. Some remained outside the federal courthouse.
Others went into U.S. District Judge Jerome Simandle’s courtroom to support their friends, owners of McKee Donato Construction Co. Kevin McKee, 47, of Egg Harbor Township, Joseph Donato, 46, of Mays Landing, and his wife, Inge, 44, the company bookkeeper.
The April 12 federal indictment charged McKee and the Donatos, of the 20-year-old company, with conspiracy to defraud the United States, evasion of federal employment taxes and failure to file individual income-tax returns.
The 21-count indictment alleges 63 overt acts. From December 1996 through December 2001, the trio under-reported employee wages by about $698,736 and Social Security taxes and Medicare taxes by $106,907.
Assistant U.S. Attorney Thomas DiLeonardo said the company employed about 11 RIOY members and, at times, an equal number of nonmembers.
In addition to not withholding, reporting and paying federal employment taxes, the indictment also alleges that the defendants used construction company checks to pay for personal purchases, which included automobiles, a refrigerator and painting at Donato’s personal residence.
All three defendants also were charged with failing to file personal income-tax returns from 1997 through 2000.
If convicted on all counts in the indictment, each defendant faces a maximum of 69 years in prison and $3.6 million in fines. However, the sentencing guidelines will ultimately determine the appropriate sentencing and fines, DiLeonardo said.
IRS Criminal Investigation agents arrested the Donatos and McKee on April 12 at their homes. They were released April 16 on a $150,000 personal-recognizance bond after informing the court that they would abide by a bail package, DiLeonardo said.
Authorities released Inge Donato on a $100,000 personal-recognizance bond April 12.
A status conference is scheduled for June 25 before Simandle.
DiLeonardo said that the judge will set a trial date at the conference. The defendants are being represented by court-appointed attorneys Christopher O’Malley, Troy Archie and Rocco Cipparone.