PITTSBURGH, Pa. - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of tax evasion, United States Attorney Scott W. Brady announced today.
Robert Rionda, Jr. pleaded guilty to evading payment of his income taxes before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that Rionda solely owned and operated Arms Insurance Group Inc, (Arms Inc.), a subchapter S corporation, from 2002 through May 2014. In October 2011, the Collection Division of the IRS opened a case on Rionda for unpaid income taxes for the 2009, 2010 and 2011 tax years. In May 2012, attempts to obtain payments from Rionda were unsuccessful, and the IRS levied his personal bank accounts.
The defendant responded to the levies by directing the company’s controller/bookkeeper to:
- Stop issuing salary checks to Rionda and his wife;
- Stop using his personal checking accounts altogether; and
- Start paying all of his personal bills from the company's bank accounts rather than from his personal bank accounts.
Over the next several years, Rionda continued to file apparently accurate corporate returns on behalf of Arms Inc., as well as personal income tax returns, but he made only minimal payments to the IRS for the personal income taxes he owed.
During the years 2009-2014, Rionda received distributions from the company each year which varied from approximately $376,000 to $1.6 million per year.
Rionda sold Arms Inc to his son over time, starting in May 2014, and he stayed on as a part owner of the son’s new business, Arms Insurance Group LLC, (Arms LLC). Arms LLC began making payments by check to Rionda that represented monthly payments on a promissory note, rent payments, and owner draw payments. Rionda deposited some of these checks to two bank accounts held by Arms Inc., rather than depositing them to personal bank accounts in his own name.
During the years 2014-2016, the new company, Arms LLC, paid distributions to Rionda of $92,000, $298,410, and $291,460.
Despite receiving all of these distributions from Arms Inc. and Arms LLC, Rionda chose not to make substantial payments towards his taxes. Rionda did, however, make payments towards his personal mortgage, a mortgage on a business property, his credit cards, and his utility bills. In addition, Rionda also transferred millions of dollars in loans and purported investments to another individual. The total tax loss, including assessed interest and penalties, is $1,539,117.00.
Judge Bissoon scheduled sentencing for 10:00 a.m on March 5, 2020. The law provides for a total sentence of 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 and the prior criminal history, if any, of the defendant.
Pending sentencing, the court released Rionda on bond.
Assistant United States Attorneys Stephen R. Kaufman and Mary M. Houghton are prosecuting this case on behalf of the government.
The Internal Revenue Service - Criminal Investigation conducted the investigation that led to the prosecution of Rionda.
Source: U.S. Department of Justice, Office of the United States Attorneys
