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Helmer Toro, co-founder of the H&H Bagels empire, was indicted by a grand jury in New York City today on felony charges accusing him of stealing withholding taxes from his employee's paychecks, and manipulating his company's New York State unemployment insurance tax payments at an illegal, lower rate.
If convicted, the 59-year-old dough boy could be sentenced to 15 years in state prison after a 37-year career in the bagel business.
Manhattan District Attorney Robert Morgenthau announced that the investigators from his office found that Toro (inset) "collected but failed to pay $369,318.77 withheld from the payroll of the employees of his bagel business."
In bagelese, he's accused of stealing hundreds of thousands of dollars in dough from the employees of his bagel empire -- dough that his workers withheld from their paychecks so that Toro's company would submit it to New York tax authorities.
A Manhattan grand jury charged him with setting up a host of shell companies in a scheme designed to illegally manipulate the unemployment insurance tax rate of his bagel business.
Toro is accused of falsely certifying that he was allowed to pay a discounted new business tax rate on his bagel empire's' state unemployment insurance taxes.
You can view Toro's grand jury indictment and his felony charges here:
Where did Toro get employees to staff these alleged shell corporations? According to Morgenthau, many of the employees working in the 'new' bagel businesses were actually transferred from the pre-existing H&H Bagel business.
Under New York law, State Unemployment Tax Act ('SUTA') dumping occurs when a business attempts to obtaining a lower rate of unemployment insurance contributions by transferring some or all of its workforce, payroll, or both to another employer, where there is at least 10 percent common ownership, management, or control of the two employers
Toro's case marks New York's first prosecution of SUTA dumping and unemployment insurance tax rate manipulation.
According to Alicia Maxey-Greene, a spokesperson for the District Attorney's Office, Toro pleaded not guilty to the charges at his arraignment today, was ordered by the Court to surrender his passport, and was released on his own recognizance before his court appearance early next month for a bail hearing.
Toro is represented by criminal defense lawyer Robert Anello of Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer.
This is not the first tax-related legal issue that Toro has been forced to confront. Last year the IRS filed a $2.335 property lien against the bagel baron and his Third Toro Real Estate Corp., listing the bagel baron's swanky Upper West Side condo in the filing.Related Resources:
Photo credit: Mdineenwob