EZjet boss arrested in NY on charge of embezzling US$20M
EZjet boss Sonny Ramdeo was yesterday arrested in Brooklyn, New York on a charge of embezzlement from his former employer.
The Florida newspaper Sun Sentinel today reported federal prosecutors as saying that Ramdeo faces charges of embezzling US$20 million ($4B) from his former employer in a payroll tax fraud scheme. The US Federal Bureau of Investigation in a statement yesterday said that he was formally indicted on December 6, 2012 and made his first appearance in a New York court yesterday.
While Ramdeo was arrested in New York he will likely face trial in Florida, according to Annette Castillo, spokeswoman for the U.S. Attorney’s Office for the Southern District of Florida, in Miami.
The report said that from as early as 2005, Ramdeo, 35, worked as the payroll supervisor at Promise Healthcare Inc. and Success Healthcare Group. The Sun Sentinel said that as the payroll supervisor for both companies, Ramdeo managed the payroll for more than 3,500 employees in hospitals nationwide.
Federal officials charge that Ramdeo incorporated PayServ Tax Inc., and told the hospital chains he would handle the transfer of local, state and federal payroll taxes to the proper agencies on their behalf. Instead, authorities charge, he kept the money.
In October, Promise Healthcare filed a lawsuit accusing Ramdeo of embezzling more than US$5 million to keep his airline afloat.
Ramdeo’s legal troubles came shortly before the US Department of Transportation suspended its air service, throwing the airline into turmoil and leaving hundreds on both sides of the Atlantic stranded and out of pocket. Refunds have since begun.
The Palm Beach Post in its online edition is reporting that Ramdeo, of Sunrise, Florida was charged with three counts of wire fraud, which could send him to prison for 20 years.
The indictment alleges that from September 2003 until October of this year, Ramdeo wired money into his accounts that was to have been used to cover payroll taxes for Promise Healthcare’s roughly 3,500 workers. He formed two companies, Payserv Tax and EZjet GT, to receive the money, prosecutors said.
The chain of private hospitals is owned by the same people who own the management company. They own hospitals in seven states. The only Florida location is Promise Hospital of Florida, the Palm Beach Post said.
According to the indictment, in 2011 and 2012 Ramdeo made two transfers, totalling US$363,700, to his account that was to be used for payroll taxes at a hospital in East Los Angeles. In October, he diverted US$100,828 that was to cover payroll taxes for employees of a hospital in Gonzales, La.
After reports that he was being sought by the FBI in the embezzlement case, Ramdeo apparently went into hiding but said via several press releases issued in EZjet’s name that he was in contact with the FBI.
The FBI press release on the case follows:
Sunrise Man Arrested and Charged in $20 Million Payroll Tax Fraud Scheme
|U.S. Attorney’s Office December 12, 2012|
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI); Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID); and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announce the unsealing of a December 6, 2012 indictment charging Sonny Austin Ramdeo, 35, of Sunrise, with wire fraud in connection with a $20 million federal payroll tax fraud scheme, in violation of Title 18, United States Code, Sections 1343 and 2. Ramdeo was arrested today in Brooklyn and made his initial appearance in federal court in the Eastern District of New York earlier today. He is expected to be removed to the Southern District of Florida on these charges.
According to the indictment, from as early as 2005, defendant Ramdeo was employed as the payroll supervisor at Promise Healthcare Inc. (Promise Health Care) and Success Healthcare Group (Success Healthcare), both of which owned and operated hospital facilities throughout the United States. As the payroll supervisor for these two companies (the companies), Ramdeo was responsible for overseeing the payment of bi-weekly wages and related payroll taxes for more than 3,500 employees.
To execute his scheme, Ramdeo allegedly incorporated PayServ Tax Inc. and thereafter represented to officers and employees of Promise Healthcare that PayServ Tax would handle the transfer of local, state, and federal payroll taxes to the proper agencies on behalf of Promise Healthcare and Success Healthcare. In fact, however, Ramdeo kept the money paid by Promise and Success Healthcare to PayServ for his personal use.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CID, and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Ellen L. Cohen.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.