Marlboro Construction Biz Operator Sentenced In Tax Fraud Case

MARLBORO, NJ - A Marlboro man who operates a Manhattan-based construction business was sentenced last week to 19 months in prison after pleading guilty to tax evasion, conspiracy to defraud the IRS and failure to pay payroll taxes, authorities said.

Bilal Salaj, 56, previously pled guilty before U.S. Magistrate Judge Ona T. Wang to conspiracy to defraud the IRS, tax evasion, and failure to pay payroll taxes. Read more: Morganville Construction Biz Operator Pleads Guilty To Tax Fraud

While Salaj was initially the record owner of the Manhattan construction business, around July 2014, the Marlboro resident began operating the business under a new entity that was "wholly owned" by a third party who worked for the construction business. Despite the purported change in ownership on paper, the Morganville man continued to control and hold decision-making authority over the business, according to the U.S. Attorney's Office.

Salaj was the responsible person under federal law for collecting, truthfully
accounting for, and paying over payroll taxes for the business to the IRS. However, prosecutors argued that, from 2014 to 2019, Salaj “devised and perpetrated a scheme to evade a substantial portion of both the payroll taxes for the construction business and Salaj’s personal income taxes for the period 2014 through 2018.”

During this four-year period, Salaj cashed - and had the on-paper business operator cash - approximately $3.2 million in business checks payable to the construction company at check cashing facilities in New York instead of depositing them into the company's operating bank account. He also withheld from his accountant any records relating to the cashed business checks, thereby filing false tax returns with the IRS, prosecutors said.

Salaj also used a portion of the proceeds from the cashed checks to pay cash wages to employees of the construction business, and spent most of the rest on personal expenses. The Monmouth County man did not withhold or pay over to the IRS any payroll taxes on the cash wages paid to the employees, and did not report to the IRS or pay any personal income taxes on the cash income he realized through the cashed checks, according to the U.S. Attorney's Office.

The tax evasion scheme, including relevant conduct, resulted in a tax loss to the IRS of approximately $952,778, the U.S. Attorney's Office said.

In addition to the prison term, a judge ordered Salaj to pay restitution to the IRS in the amount of $952,778. He was also ordered to serve three years of supervised release.

“Bilal Salaj failed to pay his tax obligations to the IRS and maintained a cash payroll for his business while cheating the government out of almost $1 million," said Acting U.S. Attorney for the Southern District of New York Audrey Strauss. "Our self-assessment system of tax reporting is not synonymous with ‘forthrightness optional.’ The government — and especially our law enforcement partners — won’t miss, overlook, or ignore those who misreport on their tax returns. In the competitive small business world, being dishonest and underreporting tax obligations might be tempting. But Salaj’s sentence is a reminder that tax fraud is a serious federal crime and not worth the risk.”