The Tax Office of
Michael Hogberg

Nigeria Falls Business Man Pleads Guilty to Tax Charge, Will Forfeit $1,000,000

by | Aug 5, 2022 | Enforcement Updates

August 5, 2022

 U.S. Attorney Trini E. Ross announced today that Frank R. Parlato, Jr. pleaded guilty to willful failure to file returns involving cash transactions of more than $10,000 before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of five years in prison and a fine of $25,000. As part of his plea, Parlato will pay $184,939.51 to the IRS. He will also forfeit approximately $1,000,000 that was seized by the Government in 2015.

Assistant U.S. Attorneys Charles M. Kruly and Michael DiGiacomo, who are handling the case, stated that between 2004 to 2017, Parlato had an ownership interest in and/or managed the One Niagara Building in Niagara Falls, NY. Following Parlato’s acquisition of One Niagara, he permitted vendors to lease space both inside and outside the building. These vendors catered to tourists and sold food, souvenirs, and tours of Niagara Falls. With business typically busy in the summer, each season Parlato negotiated new seasonal rental agreements with the building’s vendors, typically requiring each vendor to pay 25% of their gross revenue as rent. Parlato was required to file an IRS Form 8300 when receiving annual cash rent payments in excess of $10,000 in one transaction or two or more related transactions. During the time period that he owned and/or managed One Niagara, Parlato willfully failed to file IRS Forms 8300 for annual cash rent payments he received from One Niagara’s vendors which were in excess of $10,000.

For example, in 2008, a vendor who operated a food stand, agreed to rent space for 25% of the vendor gross sales. In 2010, the vendor paid Parlato approximately $19,970 in rent in cash, however, Parlato failed to file an IRS Form 8300 for the 2010 season. Parlato admits that from 2006 to 2017, the tax loss from unreported income was approximately $390,346.

The plea is the culmination of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-In-Charge Thomas Fattorusso and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Stephen Belongia.

Sentencing is scheduled for December 7, 2022, before Judge Arcara.