New York Attorney General (AG) Eric Schneiderman today announced the arraignment and charges against the owner and operator of “Tebb’s Head Shops” for stealing more than $50,000 from New York by failing to pass along customer taxes that the company had collected.
Schneiderman’s office charged John E. Tebbetts, 34, of Rome with grand larceny in the second degree and two counts of criminal tax fraud in the second degree, all class C felonies, the attorney general’s office said in a news release.
If convicted, Tebbetts faces up to 5 to 15 years in prison.
(Sponsored)
4 Steps in IT Offboarding to Protect Data & Minimize Risk
When employees are laid off or let go, the conversation of technology offboarding can be an uncomfortable one. However, cybersecurity and data protection must be a priority. This can alleviate
The Influence of Economic Uncertainty on Business Value
Businesses face uncertain conditions today, including geopolitical and cybersecurity risks, inflation concerns, environmental issues, and a lack of clarity about future tax laws and interest rates. Here’s an overview of
The three-year investigation, which Schneiderman’s office conducted jointly with the New York State Department of Taxation and Finance (DTF), included interviews and site inspections of the “Tebb’s Head Shops” located throughout Central New York, the New York AG said.
The business operates three locations in Syracuse, and single locations in Cicero, Oneida, Watertown, Utica, and Herkimer, according to its website. The company also has three locations in Maine, the website says.
DTF also conducted an audit of Tebbetts’ businesses through the review of records such as Z-tapes, bank records, sales journals, tax returns, and purchase invoices in order to substantiate business sales, Schneiderman’s office said.
“After brazenly promoting the sale of dangerous synthetic drugs and polluting our communities, Tebbetts has now used his head shops to illegally profit off of New York taxpayers,” Schneiderman said in the news release. “If any tax evader chooses not to play by the rules, my office will enforce the law to defend the necessary revenue that sales taxes provide to state services.”
Between March 2007 and September 2012, Tebbetts collected taxes on behalf of the state from the sale of items such as herbal incense, pipes, hookahs, body jewelry, and dart supplies, all of which are subject to sales tax under the New York State Tax Law, the AG’s office said.
During that time, Tebbetts didn’t return to the state the full amount of sales tax collected from his customers, which totaled more than $364,000, with an intent to evade taxes due, Schneiderman’s office said.
Sales-tax money that businesses collect from their customers belongs to the state, and they’re responsible for ensuring the funds are remitted in a timely fashion, according to the state AG.
Tebbetts is also charged with failure to report taxable sales from Tebb’s Head Shops for the periods of March 2007 through August 2012, resulting in a sales-tax liability of more than $500,000, which Schneiderman’s office says wasn’t remitted to the state.
In December 2012, Tebbetts plead guilty in U.S. District Court for the Northern District of New York to numerous federal criminal charges, including possession with intent to distribute a controlled substance, the attorney general’s office said.
Tebbetts is currently awaiting sentencing on those charges.
Contact Reinhardt at ereinhardt@cnybj.com
