Accountant takes stand in area tax case

One of the accountants who prepared the corporate and personal tax returns for Dippin Donuts and the Zourdos family took the stand on Wednesday and testified that she had filed the correct papers based on the financial information given to her by the family.

Heather O’Rourke told the jury that she never had a reason to look at the personal bank accounts of John, Helen or Dimitrios Zourdos when filing her tax returns. She said she relied on the routine W2 tax form everyone uses to file their taxes.

“We were told that all deposits go to the companies’ checking accounts,” O’Rourke said.

The Zourdos family “told us that. We have no corporate customers who deposit money into their private accounts. “

The Zourdos family defense argues that O’Rourke should have been more proactive in checking the family’s bank accounts and calendar books.

John, his wife Helen, and their son Dimitrios of Rome are on trial in federal court this week on charges of embezzling around $ 1 million in cash sales of Dippin Donuts between 2013 and 2017 and never reporting that money to the IRS to have. Prosecutors have accused the family of making some cash sales from the store and depositing the money in their personal bank accounts without telling their accountants or tax advisors about the deposits.

They are all charged with US fraud conspiracy, seven cases of tax evasion, and seven cases of assisting and assisting in filing false corporate tax returns, according to the Department of Justice, Tax Department. They face at least three to five years in federal prison if they are convicted on the charges.

tax returns

O’Rourke took the stand on Wednesday afternoon and stated that she has worked for accountant Vincent Gilroy for 30 years, helping with corporate tax work, tax returns, bookkeeping and more. O’Rourke said she and Gilroy did bookkeeping for the Zourdos family for 20 to 25 years, which left about five or six years ago.

O’Rourke told the jury that she did not do any financial planning or asset management for the Zourdos family and that she did not have access to her personal bank accounts.

A routine was developed with the Zourdos family in which O’Rourke said she would stop by the Dippin Donuts on Erie Boulevard West about every month to pick up the company’s bank statements to track company sales. She said she doesn’t do this for every customer, but Dippin was on his way to her accounting office in New Hartford.

O’Rourke said either John or Helen would be in the store often to let them into the office to get the company’s bank statements.

“It was a particular drawer you pulled open” to find the paperwork, O’Rourke testified.

“Sometimes they stayed on the chair that had already been put together for me. I never opened other drawers because you didn’t open other people’s desk drawers. Everything I needed was in this one drawer. “

O’Rourke said these were “quick visits”. She testified that the Zourdos family told her that all company sales were deposited into the company’s bank accounts and it was “never” said that company money was deposited into personal bank accounts.

O’Rourke told the jury there was no need to look at receipts or sales notebooks because “we got the gross sales from the bank statements.”

With that information, O’Rourke said they would draft the corporate tax returns and review the drafts from their boss. Vincent Gilroy would also meet with the Zourdos family once a year to review their financial statements, she said. Gilroy was due to testify on Thursday.

“Copies of financial statements and company statements are always presented to the customer,” said O’Rourke. She said the Zourdos family signed an authorization form stating that they reviewed tax returns and consented to their electronic filing.

When filing the family’s personal tax returns, O’Rourke said they relied on their W2 forms for the wages they received from Dippin, along with separate investment accounts. O’Rourke said the W2 forms were created by the payroll company that processed Dippin’s paychecks.

Regarding Dimitrios Zourdos, O’Rourke stated that she never had any correspondence with him as, as far as she knew, he was not involved in the company’s bank accounts. O’Rourke said she received Dimitrios’ W2 and used it to file his personal tax return.

Calendar books

Dippin Donuts employees said the Zourdos family kept calendar books in the office to keep track of daily sales and daily deposits, according to previous testimony at the trial. According to the prosecutor, these daily records would never even out and there was always some cash missing from the numbers.

O’Rourke testified Wednesday that she was never shown these books or even told about them by the Zourdos family.

“I should have been told that,” O’Rourke testified. “I have no idea what they did.”

In 2016, the Dippin Donuts store on Black River Boulevard was audited by the IRS. O’Rourke said the auditor knew about the calendar books and it was O’Rourke’s job to collect them from Dippin Donuts and give them to the auditor.

Defense attorney David Garvin, who represents John and Helen Zourdos, asked O’Rourke why she never looked the books when she picked them up for the auditor.

“I just picked up the book and brought it to the auditor’s office,” O’Rourke replied. “We just stacked everything in a box, that’s how we normally do it.”

She said her work on the tax return had already been completed and she had no reason to double-check her work or see any new documents. She said everything was just gathered and given to the auditor. The auditor should comment on Thursday.

Garvin also asked O’Rourke about Dippin Donuts’ status as a “C Corporation” and what that meant for taxation. She explained that a C corporation is taxed as a business, and then the owner is also taxed on the money they make through the business.

Garvin suggested that a legitimate tax strategy is to “sweep” money from a corporate account into a personal account in order to avoid too much double taxation. O’Rourke agreed that this was a strategy, but she made it clear that when C Corporations normally do this, they are giving the money to the owners through year-end bonuses, complete with checks that are posted and taxed on the W2 forms will.

O’Rourke said she did not know of any customers who would “cash out” the money by making untaxed cash deposits into their personal bank accounts.

Luxury purchases

Two other witnesses told the jury on Wednesday of some expensive purchases by the Zourdos family.

Jay FitzGerald of Geneva Foreign & Sports testified that he sold a 2001 Porsche to John Zourdos, which he described as “a really nice car”.

FitzGerald said John paid $ 21,000 in cash of the $ 47,556 total cost of the car.

Jay Lowenstein of Henry Wilson Jewelers in Syracuse testified how John and Dimitrios Zourdos came to him to buy Rolex watches. Lowenstein said John paid $ 18,000 in cash to buy a rose gold Rolex watch with diamonds for his wife, while Dimitrio’s $ 12,660 loan through Citibank paid for a $ 15,660 Rolex.

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