Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: November 21, 1996

Release #601-96

Contact: Colleen Roche (212) 788-2958 or Dwight Williams (212) 788-2972


MAYOR GIULIANI SALUTES DEPARTMENTS OF FINANCE AND INVESTIGATION
FOR UNCOVERING LARGEST TAX FRAUD CASE IN CITY HISTORY

Mayor Rudolph W. Giuliani today congratulated the New York City Department of Investigation (DOI) and the Department of Finance (DOF) for uncovering -- and successfully investigating -- the largest tax fraud case in City history.

According to Mayor Giuliani, the Department of Investigation received a tip in August 1994, which led to the discovery of a major property tax fraud scheme within the Department of Finance dating back to at least 1994, and possibly as far back as the late 1980s. The undercover investigation showed that, in exchange for illegal bribes, a small group of employees in the Office of City Tax Collector conspired with property owners and brokers to eliminate or reduce property taxes on more than 1,000 properties throughout the City. Among the specific schemes uncovered were computer manipulations which made it appear as if unpaid taxes had been paid; and in other cases, legitimate tax payments were misapplied to the accounts of bribe-paying owners.

"I would like to congratulate the Department of Finance and Department of Investigation for uncovering this major tax fraud," Mayor Giuliani said. "The federal charges filed today are the culmination of 20 months of superb investigatory work conducted by an elite corps of DOI investigators. This criminal scheme to defraud New York City of millions and millions of tax dollars was not only a violation of federal law but an affront to the hard working and tax-paying men and women of this City."

The Mayor said that since the time the Department of Finance became aware of this scam it has implemented tough new safeguards and management controls to insure the integrity of its tax collection systems.

The Mayor also acknowledged the important roles played by the FBI and the United States Attorneys Offices for the Eastern and Southern Districts of New York in the investigation leading to today's arrests.



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