ELYRIA — Lorain tax consultant Richard Zakarian has been indicted on a theft charge for allegedly bilking a customer out of $14,000 the man thought he had put into an individual retirement account.
Assistant Lorain County Prosecutor Dave Muhek said after taking the victim’s money, Zakarian gave him false paperwork to make it look as if the money had been invested.
“He thought he was making money, and it was fictitious,” Muhek said.
The theft allegedly took place between 2003 and 2012, according to the indictment.
Zakarian, 47, is the target of an ongoing investigation that began this summer when Spitzer Management Inc., learned that Zakarian’s company, Benjamin Franklin Tax Service, hadn’t filed proper paperwork or paid federal and state taxes with money it had withdrawn from Spitzer’s accounts.
Spitzer sued Zakarian, accusing him of stealing more than $700,000 from the company and its employees that was supposed to be used to pay taxes.
Spitzer attorney Anthony Giardini has said he that in addition to filing the lawsuit, he turned the information over to county Prosecutor Dennis Will’s office. Zakarian was first indicted for stealing from Spitzer in August and he also faces a theft charge for allegedly stealing $20,198 from Pallens Auto Concepts in Lorain, although no indictment has been handed down in that case.
The Pooh County Nursery School in Cleveland sued Zakarian and his company on Wednesday, accusing him of stealing $117,000 from the school after telling school officials that they had won two years of free tax, payroll and accounting services through his charity, the Benjamin Franklin Foundation.
The Animal Charity Humane Society in Youngstown also has filed a police report accusing Zakarian of failing to pay the proper government agencies $62,059 in payroll and unemployment taxes.
Giardini and Will have both said there are more victims who have contacted them about Zakarian’s business practices.
“The investigation has revealed that Zakarian collected monies from numerous businesses and organizations with the intent to pay federal, state and local income taxes,” Lorain police Detective Buddy Sivert wrote in the report on the alleged theft from the humane society. “It has been discovered that Zakarian has failed to pay the taxes to these government offices.”
Another concern of those whom Zakarian is accused of stealing from is who will be responsible for paying the back taxes.
An U.S. Internal Revenue Service spokeswoman declined to comment on the specifics of the Zakarian investigation, but according to the IRS website, employers using third parties to handle their payroll services may be liable for paying those missing taxes.
“Employers are ultimately responsible for the payment of income tax withheld and both the employer and employee portions of Social Security and Medicare taxes,” the IRS website said.
That isn’t an absolute, according to the website, which notes that such liability depends “on the facts and circumstances.”
Giardini said he’s aware of the IRS policy, but it’s an issue that he intends to take up with the government on Spitzer’s behalf. Although Spitzer has put civil holds on Zakarian’s bank accounts, Giardini said the money in the bank isn’t anywhere near what Zakarian is accused of stealing.
“It’s just an unholy mess,” he said.
Contact Brad Dicken at 329-7147 or firstname.lastname@example.org