Date: October 7, 2021 Contact: newsroom@ci.irs.gov Providence, RI — The owners of separate and unrelated businesses pleaded guilty in federal court in Providence to charges they failed to report substantial amounts of income to the Internal Revenue Service and failed to pay taxes on the income, announced Acting United States Attorney Richard B. Myrus. On Wednesday, Gladys Rossi, the sole owner and operator of R.I.J. Inc, a Providence-based company that affixes price tags to jewelry for other companies, admitted to a federal court judge that she failed to disclose more than $1.2 million dollars in gross revenue and failed to pay more than $400,000 in taxes due to the Internal Revenue Service for tax years 2012 through 2015. According to court documents, from 2012 through 2015, Rossi paid employees under-the-table and failed to maintain or prepare business records that accurately tracked expenditures, gross income, net income, profits, and dividend disbursements. An investigation by Internal Revenue Service Criminal Investigation determined that business and personal tax returns filed by Rossi failed to report income totaling $1,226,707.21, resulting in an underpayment of taxes of at least $407,767. Appearing before U.S. District Court Judge Mary S. McElroy, Rossi pleaded guilty to two counts of filing a false tax document. She is scheduled to be sentenced on January 12, 2022. According to a plea agreement filed in this matter, the defendant will pay full restitution to the Internal Revenue Service, including all back taxes and interest. In a separate prosecution, Richard Karski, of Brighton, MA, today admitted that for tax years 2015 through 2018, he failed to report $1,917,658.96 in business and personal income and failed to pay $192,814 in taxes due the Internal Revenue Service. According to court documents and information presented to the court, an investigation by Internal Revenue Service Criminal Investigation determined that from 2015 through 2018, Karski operated K.C.O. Builders based in Quincy, MA. During that time Karski traveled to Rhode Island and cashed checks he received from his customers at a check-cashing business in Rhode Island. He failed to declare any of the income or pay any taxes to the Internal Revenue Service. Appearing before U.S. District Court Judge Mary S. McElroy, Karski pleaded guilty to tax evasion. He is scheduled to be sentenced on January 18, 2022. According to a plea agreement filed in this matter, the defendant will pay full restitution to the Internal Revenue Service. The case brought against Gladys Rossi is being prosecuted by Assistant U.S. Attorney Milind M. Shah. The case brought against Richard Karski is being prosecuted by Assistant U.S. Attorney Lee H. Vilker.
