|TRENTON – Acting Attorney General John J. Hoffman announced that an Ocean County man pleaded guilty today to evading more than $500,000 in state sales tax by fraudulently claiming exemptions on 120 luxury cars he purchased as part of an illegal business to acquire vehicles for overseas buyers. He claimed exemptions for 56 cars by falsely buying them in the name of a charity for children with cancer.
Carl F. Monto, 54, of Beachwood, pleaded guilty today to second-degree theft by deception and third-degree failure to pay tax before Superior Court Judge Anthony J. Mellaci Jr. in Monmouth County. Under the plea agreement, the state will recommend that Monto be sentenced to seven years in state prison. For purposes of restitution, he and his wife, Denise M. Monto, must forfeit $537,784 in assets seized from them by the state in August 2014 when both were arrested on theft charges. The state has agreed not to oppose Denise Monto’s application to the Pre-Trial Intervention program. Judge Mellaci scheduled sentencing for Carl Monto for May 15. Carl Monto surrendered to custody today and was lodged in the Monmouth County Jail pending sentencing with bail set at $200,000 cash.
Deputy Attorney General Peter Gallagher prosecuted Monto for the Division of Criminal Justice Financial & Computer Crimes Bureau. The charges stem from an investigation by the Division of Criminal Justice and the Office of Criminal Investigations of the New Jersey Department of the Treasury, assisted by the New Jersey Division of Consumer Affairs and the State Motor Vehicle Commission.
“It’s outrageous that Monto used the false cover of a charity for children with cancer to evade taxes and generate his illicit profits,” said Acting Attorney General Hoffman. “His despicable conduct is an affront to honest taxpayers, as well as worthy charities, which sometimes struggle to raise funds because of the distrust generated by unscrupulous and conscienceless operators.”
Monto admitted that he evaded $264,806 in New Jersey sales tax on 56 luxury cars by falsely presenting dealerships with a charitable exemption certificate for Tri County Charity Center, Inc., a charity that purportedly benefited children with cancer. In reality, Monto did not operate the charity or purchase cars for the charity. Instead, he and his wife bought cars for overseas buyers, while paying the president of the charity $100 per car for use of the charity’s name. The buyers wired funds to the Montos, who converted them to cashier’s checks to conceal the source. In September 2012, the Division of Consumer Affairs reached a $65,000 settlement with the Montos and the president of Tri County related to the fraud. The settlement included an $18,000 payment to the NYU Langone Medical Center for treatment and research, and required the Montos to dissolve their unlicensed business, I Buy Cars for You, LLC.
Immediately after that settlement, however, the Montos formed I Buy Consulting, LLC, and continued their illegal operations. They used a new strategy to obtain tax exemptions, falsely claiming they were buying cars for a legitimate car dealership or leasing company. Such entities are exempt from the 7% sales tax because they are not the end user. Monto admitted he evaded over $250,000 in tax on 64 additional vehicles by presenting false exemption certificates for car dealerships and leasing companies.
“By locking up offenders like Monto, we hammer home the message that tax evasion is a serious crime that robs New Jersey and its law-abiding taxpayers of huge sums of needed revenue,” said Director Elie Honig of the Division of Criminal Justice. “We will continue to conduct these aggressive investigations and prosecutions in partnership with Treasury’s Office of Criminal Investigations.”
“The Division of Taxation will not tolerate acts of tax fraud and tax evasion and will continue to work with the Division of Criminal Justice to pursue the individuals who commit these crimes that harm all of the honest taxpayers of New Jersey,” said Dennis Shilling, Acting Director of Treasury’s Division of Taxation.
The Montos operated the unlicensed businesses I Buy Cars For You and I Buy Consulting out of their home on Ocean Avenue in Beachwood. They typically purchased popular models of Mercedes Benz, BMW and other luxury vehicles, which in some cases were not available in the country of the buyer. The Montos shipped the vehicles to various countries, including Russia, China, South Korea, Finland, Sweden, Lithuania, Germany and Canada. In many cases, the Montos only made a profit because of the 7% sales tax they evaded. The cars were purchased from numerous different dealerships. Carl Monto used false identities and fraudulent driver’s licenses to purchase vehicles in the name of Tri County.
The case was investigated for the Division of Taxation Office of Criminal Investigation by Criminal Forensic Auditors Nicole Hines and Supervising Forensic Auditor Debra Lewaine. Detective Richard Loufik and Deputy Attorney General Gallagher handled the investigation for the Division of Criminal Justice Financial & Computer Crimes Bureau. Deputy Attorney General Derek Miller handled the state’s criminal forfeiture action.
Acting Attorney General Hoffman thanked the Division of Consumer Affairs and the New Jersey Motor Vehicle Commission Security and Investigation Unit for their valuable assistance in the investigation.
Acting Attorney General Hoffman and Director Honig noted that the Division of Criminal Justice has established a toll-free tip line 1-866-TIPS-4CJ for the public to report corruption, financial crime and other illegal activities. Additionally, the public can log on to the Division of Criminal Justice webpage at www.njdcj.org to report suspected wrongdoing. All information received will remain confidential.