By Ogozi John
The owner of a New York company that operated a school bus fleet, Laraine Castellano, 72, and her sons, Thomas and Dennis Scialpi, 51 and 44, who were company executives, have been indicted in a multi-million dollar bank and tax fraud scheme. Their company was USA United Holdings Inc., a conglomerate of bus companies that did $310 million in contracted business with New York City from 2004 to 2011.
Their holding company included USA United Fleet, Inc., also known as Shoreline Fleet, Inc; USA United Transit, Inc., also known as Shoreline Pupil Transit, Inc, United Tom Tom Transportation, Inc., also known as Shoreline Buses, Inc.; USA United Bus Express, Inc., also known as Shoreline Bus Express, Inc.; and United Fleet, Inc., prosecutors said.
According to the indictment, in 2004 and 2007 their companies received two loans that totaled $14 million for the purported purpose of creating an employee stock ownership plan for non-union workers.
However, the employees who were supposed to be the beneficiaries of this plan never knew that such a fund existed, and none of them received any money from it until the company folded in 2011, defaulting on the loans.
In 2007, Thomas Scialpi directed an unnamed man to create false corporate income tax returns for one of the bus companies, United Tom Tom, and also prepare false documents that showed that his wife was an employee of the company. Using these false information, he applied for and obtained more than $700,000 which he used to pay for a yacht; and he later defaulted on the loan, prosecutors allege.
Castellano and Thomas Scialpi are also accused of creating several non-existent “professional employer organizations,” or employee leasing companies, which they used to defraud the government of more than $10 million in payroll taxes, according to prosecutors.
“Companies owned and operated by Laraine Castellano, Thomas Scialpi, and Dennis Scialpi received more than $300 million from city contracts to transport children to New York City public schools. But that was not enough for these defendants, as alleged, they used their companies to defraud the federal government and financial institutions of tens of millions of dollars, all to enrich themselves,” said Acting United States Attorney Kelly Currie.
Saddled with debts and dispute from over 1,100 union workers over unpaid benefits, the holding company filed for bankruptcy in July 2011 with more than 400 yellow buses in their fleet.
In a related case, the holding company’s comptroller, William Moran, and its certified public accountant, George Silverman, both pleaded guilty in separate fraud and tax evasion charges.
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