New York Attorney General issued the following announcement on August 08.
Mirel And Burnett Must Now Pay Over $1.3 Million In Restitution, Face Years in State Prison
Attorney General Barbara D. Underwood announced the guilty pleas of Robert J. Mirel (a/k/a Robert Morel, a/k/a RJ Mirel) and Debra Burnett (a/k/a Deborah Barnett, a/k/a “Debby Turner”)—the owners and operators of Arlington Equipment Corp. d/b/a Arlington Manipulators—for defrauding numerous companies and business owners throughout New York and the United States by pretending to sell glass installation equipment and laundering millions of dollars in criminal proceeds through their shell and shelf companies.
Both defendants pleaded guilty in Warren County Court to Grand Larceny in the Second Degree, Money Laundering in the Second Degree, Scheme to Defraud in the First Degree, and Criminal Tax Fraud in the Third Degree. Mirel will be sentenced to 5 to 15 years in state prison and Burnett will be sentenced to 3 to 9 years in state prison on September 27th, 2018. They will also be required to pay over $1.3 million in restitution.
“If you cheat your customers, evade paying taxes, and steal from workers, you’re just a criminal with a business card—and we will catch you,” said Attorney General Underwood. “My office will continue to hold accountable those who scam New Yorkers.”
The Attorney General’s investigation, dubbed “Operation Bob the Builder,” revealed that Arlington Equipment Corp. was one of the only manufacturers of glass manipulators in North America at the time the business started in Queensbury, NY. Glass manipulators are used by glass and glazing companies around the world to help install heavy glass in high-rise buildings and position custom pieces of glass at angles other than 90-degree intervals. As stated in the indictment, over at least five years, Mirel and Burnett took advantage of this near monopoly and stole over $1.3 million from almost 60 customers across the country, as well as defrauding the New York Department of Labor, The New York Department of Tax and Finance, and several employees who were not fairly compensated.
Mirel and Burnett’s scheme victimized not only New York customers, but businesses across the country in California, Connecticut, Colorado, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Ohio, Oklahoma, Rhode Island, Texas, Virginia, and Washington, as well as outside the United States in Australia, Canada, and Germany. In some instances, smaller companies that depended on receiving services from Arlington Equipment Corp. were unable to recover from the theft, and ultimately went out of business.
Superintendent George P. Beach II said, “These guilty pleas, and the solid work by law enforcement on this case, ensure these individuals will no longer be able to defraud companies and organizations throughout New York and beyond. We want to send a message to those who prey on hard-working business owners, even their own employees, we will work together to bring you to justice. Thank you to our state and local partners for their dedication, and we look forward to partnering again to put an end to these types of practices.”
“Inter-agency cooperation and the sharing of resources and intelligence is what led to a successful outcome and the possibility for victims around the country to be compensated and made whole,” said Lt. Steve Stockdale, Warren County Sheriff’s Office.
“The elaborate scam and outright thievery committed in this case left a wide swath of destruction, victimizing unsuspecting customers, businesses, employees, and ultimately all New Yorkers,” said Acting Commissioner of Taxation and Finance Nonie Manion. “These perpetrators will now be held accountable, and we will continue to work with all levels of law enforcement to root out similar acts of fraud.”
According to the indictment, by 2012, customers purchasing manipulators from Arlington Equipment Corp. provided a down payment of at least 50% but never received a finished product. By April 2013, Arlington had terminated almost all of their employees. Nevertheless, Arlington continued to take dozens of orders for manipulators through at least 2016. In many instances, Mirel and/or Burnett would inform customers that the manipulators were complete and ready to ship, but they required customers to pay the balance of the order prior to shipment; however, after receiving the balance, Arlington never sent the manipulator to the customer. Mirel and Burnett also took manipulators from victims for repairs, and then either repaired or sold them to other customers, or dismantled them to use their parts in new and refurbished products.
The Attorney General’s investigation further revealed that Burnett and Mirel used bank accounts of shell and shelf companies that they set up at multiple financial institutions to launder the proceeds of their criminal enterprise through at least eight banks accounts. Shell companies serve as a vehicle for business transactions without having any significant assets or operations. Shelf companies are entities that are created and left with no business activity, and subsequently used at a later point in time without the need to go through the procedures of creating a new entity. These entities included Arlington Equipment Corp.; Debbie Turner Music, LLC; Autowild International, LLC; Arlington Holding Management, LLC; AllMobile Technologies, LLC; and Arlington Manipulators.
According to statements and filings by the Attorney General’s office, since at least 2012, Mirel and Burnett laundered money through their corporate entities in various ways, including but not limited to:
Making substantial cash withdrawals of victim money, then purchasing official bank checks payable to one of their other entities, and subsequently paying personal expenses with those funds so as to appear as if they were coming from a legitimate source of income;
Making substantial cash withdrawals of victim money, then purchasing official bank checks payable to one of their other entities, and subsequently writing checks back to an Arlington account in an attempt to artificially inflate the sales cash flow;
Structuring cash withdrawals and deposits in an attempt to move criminal proceeds undetected; and,
Taking new victims’ money both for personal benefit and using it to buy parts to build manipulators for prior victims that had not received their manipulators as originally promised.
When customers complained, Mirel would provide excuses that, in most cases, went on for years. According to the Attorney General’s office, Arlington often told victims that parts were unavailable or on backorder, while telling the few employees that worked there that there was no cash to purchase the necessary materials to build the manipulators. Meanwhile, Arlington continued accessing the victims’ money to carry out their criminal activity and pay personal expenses; in some instances, Arlington even asked employees to pay for materials, promising to reimburse them once the sale was made, yet never did so. According to the indictment, employees are owed over $100,000 in parts purchased on behalf of Arlington.
Moreover, Mirel and Burnett paid themselves and employees with payroll checks from Paychex, Inc., as well as corporate checks and cash, giving their employees the misimpression that their W2s would reflect their tax withholdings, when in fact that money was not being withheld. Mirel and Burnett also falsely reported their income to the NYS Department of Taxation and Finance on the IT-201 Personal Income Tax Filings for the tax years of 2013 and 2014 by an excess of $470,000, incurring a liability in excess of $30,000. Furthermore, they falsely caused NYS-45 Forms to be filed with the NYS Department of Labor, so as to not pay and underpay unemployment insurance.
According to statements by the Attorney General’s office, by 2016, Mirel and Burnett also created a prospectus showing an estimated cash flow of over $11 million, in an attempt to sell Arlington and attract investors to provide funding necessary to continue perpetrating their scheme. In this prospectus, they indicated that they anticipated selling more than 50 manipulators per quarter, or 200 manipulators a year. The investigation revealed that these numbers were grossly inflated, as Arlington never manufactured more than 10 manipulators per year.
In April 2018, Mirel and Burnett were each charged by and indictment in Warren County Court with the following 29 felonies: Money Laundering in the Second Degree, a class C felony (two counts); Grand Larceny in the Second Degree, a class C felony (two counts); Grand Larceny in the Third Degree, a class D felony (fourteen counts); Scheme to Defraud in the First Degree, a class E felony (one count); Criminal Tax Fraud in the Third Degree, a class D felony (two counts); and Offering a False Instrument for Filing in the First Degree, a class E felony (eight counts).
Mirel and Burnett pleaded guilty to Money Laundering in the Second Degree, a class C felony; Grand Larceny in the Second Degree, a class C felony; Scheme to Defraud in the First Degree, a class E felony; and, Criminal Tax Fraud in the Third Degree, a class D felony. Mirel and Burnett’s pleas resolve additional alleged crimes of money laundering, grand larceny, criminal possession of stolen property, falsifying business records, attempted mortgage fraud, and securities fraud for which they could have been charged in Albany, Kings, Nassau, New York, Queens, Saratoga, Suffolk, Warren, Washington and Westchester Counties.
Mirel is expected to be sentenced to 5 to 15 years in state prison, and Burnett is expected to be sentenced to 3 to 9 years in state prison. Additionally, confessions of judgment will be entered against the defendants, requiring them to pay the full amount of their theft back to their 58 victims, totaling over $1.3 million. Sentencing is scheduled for before Hon. John S. Hall, Jr. on September 27th, 2018.
Attorney General Underwood thanks the New York State Police Financial Crimes Unit, Senior Investigator Timothy Marten and Investigator Charles Williams, Warren County Sheriff Nathan H. “Bud” York and Investigator Christopher J. Hatin, New York State Department of Taxation and Finance Forensic Tax Auditor Kimlee A. Stewart, New York State Department of Labor Unemployment Insurance Division Auditor Samantha Ernst and Assistant Director of Adjudication and Determination Lynne Camileo and Assistant Deputy Commissioner for Worker Protection Milan Bhatt, and the Warren County District Attorney Jason M. Carusone and his office, for their valuable assistance on this investigation.
The case is being prosecuted by Assistant Attorney General Philip V. Apruzzese of the Attorney General’s Criminal Enforcement and Financial Crimes Bureau. The Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo. The Criminal Division is led by Executive Deputy Attorney General for Criminal Justice Margaret Garnett and Chief Deputy Attorney General Alvin L. Bragg, Jr.
The OAG investigation was conducted by Investigator Mark J. Terra, under the supervision of Deputy Bureau Chief Antoine Karam. The Investigations Division is led by Chief Investigator Dominick Zarrella. Forensic accounting was performed by Principal Forensic Auditor Meaghan E. Scotellaro. The Forensic Audit Section is led by Chief Auditor Edward J. Keegan and Deputy Chief Auditor Sandy Bizzarro.
Original source can be found here.