Michael Shvo Pleads Guilty to Tax Fraud

Shvo confessed in Manhattan Supreme Court that he intentionally avoided New York State and local sales taxes

Michael Shvo with Francois-Xavier Lalanne’s sheep. Photo Credit and Via aArtSpace.com.

(New York, NY) — Developer Michael Shvo avoids jail time and pleads guilty to tax fraud.

In 2016, Manhattan District Attorney Cyrus R. Vance, Jr. indicted Shvo for allegedly dodging the payment of over $1.4 million in taxes. He confessed in Manhattan Supreme Court that he intentionally avoided New York State and local sales taxes on purchases of fine art, furniture, jewelry, and a Ferrari.

Between 2010 and 2016, to avoid sales tax, Shvo made false representations that some of his purchases were being delivered to the Cayman Islands. To evaded New York State taxes he put the title and registration of his Ferrari in the name of his company in Montana. He also used resale certificates to avoid paying sales taxes on a whopping $65,000 worth of jewelry and furniture.

“I thank our Office’s prosecutors and our colleagues at the New York State Department of Taxation and Finance and New York City Department of Finance for their work to hold him accountable and return this badly-needed revenue to our City and State.” Said District Attorney Vance.

Though Shvo won’t be spending any time behind bars, he is required to pay $3.5 million in compensation to the state. The charges consist of criminal tax fraud in the second, third and fourth degrees, failure to file taxes and offering a false instrument for filing in the first degree. The crime carries a maximum sentence of 15 years in prison, and while Shvo has gotten off easy, if he doesn’t pay the restitution he could be facing time in state prison.

“The settlement requires Michael to pay the sales and use taxes on certain works of art, along with interest and some penalties, and the case will be completely resolved. We anticipate he will meet those conditions before the adjourned date, and this matter will be fully closed and behind him.” Says Shvo’s attorney, Ben Brafman.

Getty gas station at 501 West 24th Street. Photo Credit: Design Life Network

According to his attorney, Shvo is relieved to put this 19-month long case behind him and put more focus on his current condo projects. Though his involvement with the current plans is limited because of the indictment, he will still be contributing to the redevelopment of the Crown Building at 730 Fifth Avenue, the Getty gas station at 501 West 24th Street, a Soho condo project at 565 Broome Street, and a skyscraper at 125 Greenwich Street.

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