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For Immediate Release:  
For Further Information:
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December 3, 2007  

Peter Aseltine
609-292-4791

Office of The Attorney General
- Anne Milgram, Attorney General
Division of Criminal Justice
- Gregory A. Paw, Director

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Owners of Warren County Paving Company Indicted for Failing to Turn Over More Than $200,000 in Payroll Taxes

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TRENTON - Attorney General Anne Milgram and Criminal Justice Director Gregory A. Paw announced that a Warren County couple and their paving company were indicted today on charges they failed to turn over $207,000 in state payroll taxes on behalf of their employees.

According to Director Paw, Christopher Nemeth, 40, of Stewartsville, his live-in girlfriend, Marisol Garcia, 37, and their company, Nemeth Enterprises Inc., were indicted by a state grand jury in a four-count indictment charging them with second-degree conspiracy, second-degree misapplication of government property, third-degree failure to file state quarterly payroll tax returns and third-degree failure to pay or turn over payroll taxes.

Nemeth runs the paving company from his home with Garcia’s help. The company formerly did business as Nemeth Asphalt Paving Company, but the couple incorporated a successor entity, Nemeth Enterprises Inc., in Pennsylvania in 2006, with Garcia as sole owner and officer, in an alleged effort to avoid New Jersey auditors. The charges stem from a joint investigation by the Department of Labor and the Division of Taxation.

The indictment alleges that from 1999 through the second quarter of 2007, the defendants failed to pay the state $207,003.57 in payroll taxes. The sum includes $62,603.77 collected from employee wages – $40,038.78 in gross income taxes and $22,564.99 in taxes for the state’s unemployment and disability insurance funds (UI/DI taxes) – which the defendants were required to hold in trust until remitted to the state. It also includes $144,399.80 in required employer UI/DI taxes. Throughout that period, the defendants failed to file payroll tax returns, which must be filed quarterly with the Division of Taxation, and employer wage reports, which must be filed annually with the Department of Labor.

Nemeth routinely employed 10 to 12 workers who were laid off during the winter months, resulting in workers filing unemployment claims. The Department of Labor paid out more than $100,000 in unemployment benefits to Nemeth’s workers during the years in question despite the fact that the company made no contributions to the unemployment insurance fund. Since 2004, the defendants have repeatedly resisted and evaded the state’s efforts to compel the company to file wage reports and payroll tax returns, remit employee withholding taxes, and pay UI/DI taxes.

The case was investigated by Auditor Alison Gruhler of the Department of Labor - Division of Employer Accounts and Auditor Kevin Curry of the Division of Taxation - Office of Criminal Investigation. Deputy Attorney General Denise Grugan of the Division of Criminal Justice - Major Crimes Unit presented the case to the state grand jury.

Second-degree crimes carry a maximum sentence of 10 years in state prison and a criminal fine of $150,000, while third-degree crimes carry a maximum sentence of five years in prison and a fine of up to $15,000.

The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.

The indictment was handed up to Superior Court Judge Linda R. Feinberg in Mercer County, where the defendants will be ordered to appear at a later date.

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