Date: November 17, 2022 Contact: newsroom@ci.irs.gov Pittsburgh, PA — A former Pennsylvania Health Services company executive has pleaded guilty in federal court to a charge of conspiracy to defraud the United States, United States Attorney Cindy K. Chung announced today. Joseph W. Nocito, of Sewickley, Pennsylvania, pleaded guilty to one count before Senior United States District Judge Joy Flowers Conti. In connection with the guilty plea, the court was advised that between 2006 and 2012, Mr. Nocito, as CEO and President of Pittsburgh-based Automated Health Systems, conspired to fraudulently write off millions of dollars as business expenses against other companies he owned named Palace Development Inc, Nocito Enterprises and Jonnolley Properties in the construction of his 39,000-square-foot Bell Acres home known as "Villa Noci," including both the exterior and interior construction, design and furnishings, an outdoor pool, landscaping for the grounds, and a playground, tennis court and bocce court. Mr. Nocito also fraudulently expensed millions of dollars for other personal expenses such as luxury vehicles, personal fitness, and private school tuition for grandchildren. The tax consequence of this scheme enabled Mr. Nocito to avoid paying approximately $4 million in personal income tax on his 1040 personal income tax returned between 2006 and 2012, causing the filing of false personal and corporate income tax returns. Mr. Nocito also conspired to conceal AHS Inc. taxable income by shuffling millions of dollars through these companies, and falsely characterized the transfers as management, administrative or consulting expenses causing him to significantly underreport company profits. The tax consequence of the concealment of corporate income enabled Mr. Nocito to avoid paying an estimated $11 million in corporate income tax for the conspiracy period. As part of the guilty plea, Mr. Nocito agreed to pay criminal restitution to the Internal Revenue Service of $15,824,056 prior to his sentencing date. Judge Conti scheduled sentencing for March 23, 2023. date and time of sentencing The law provides for a total sentence of not more than five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Pending sentencing, the court continued the defendant's bond. Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government. The Internal Revenue Service-Criminal Investigation and United States Postal Inspection Service conducted the investigation leading to the prosecution of Joseph Nocito.
