County businessman pleads guilty to tax fraud
Connected to tech kickback scheme, feds say
— A wealthy local businessman recently pleaded guilty to tax fraud as part of a kickback scheme that spanned the globe during his days as an executive at Google, federal prosecutors reported.
Simon T. Tusha, 43, of Forest Hill, pleaded guilty May 20 to conspiracy to obstruct and impede the IRS, defrauding the government of nearly $1 million in tax returns, according to the Western District of Pennsylvania U.S. Attorney’s Office.
Tusha, who purchased the 162-acre, waterfront Elk Manor horse farm in
July 2011 and turned it into a viable wedding venue, has been known to stir controversy here. He first envisioned opening a wedding venue with a bed and breakfast at his Elk Neck property, but the project was not properly zoned for the largely residential area. Neighbors even organized protests attempting to dissuade potential wedding customers and clients.
After the Cecil County Board of Zoning Appeals denied a special exception for the property, Tusha instead filed for the property to become a winery, planting grapes and skirting other potentially problematic zoning restrictions. Since then, his property has hosted scores of weddings and become an event site for other fundraisers.
In his latest controversy, however, Tusha admitted in federal court in Pittsburgh that he received some $3.2 million in kickbacks from companies in the United Kingdom and the Netherlands who were negotiating contracts for data centers with Google and then hid the money from the IRS through a series of shell companies he and his co-conspirators created, according to U.S. District Court records.
While serving as Google’s strategic negotiator for its global infrastructure group in 2008 and 2009, Tusha negotiated contracts with data centers around the world. Assistant U.S. Attorney Jim Wilson reported that Tusha conspired with TCN Assets in the Netherlands to help the company gain an advantage with Google and also demanded payments from Evolved IT in the U.K., now defunct, for similar favorable treatment over its competitors.
“His actions, which benefited TCN and Evolved IT, were clearly in derogation of his duties and responsibilities to his employer,” Wilson read into court records. “In the process of exploiting his relationship with his employer for personal advantage, Tusha recruited individuals to portray themselves as ‘brokers and/or consultants’ for his interactions with TCN and Evolved IT in order to conceal the illicit nature of his agreements with TCN and Evolved IT from both his employer and the IRS.”
Wilson said Tusha and other cohorts set up shell companies, including M.V. Business Group in Dominica and Allrom Consulting in the British Virgin Islands, which they held out to be brokers for TCN Assets and Evolved IT respectively. In reality, however, those companies were only established to disguise from the IRS and from Google the source of money flowing to Tusha’s accounts, some of which he used to buy property in Maryland, according to U.S. District Court records.
Federal prosecutors reported that Tusha recruited two people, one being Howard Weinberg, of Maryland, to pose as brokers and set up bank accounts for the shell companies in order to transfer the money. Weinberg set up M.V. Business and wired $300,000 from its Bank of America account to an account at PNC controlled by Tusha. He later transferred another $315,000 from MV’s Bank of Bermuda account to that same account, according to U.S. District Court records.
Tusha did not report any of the illegal income on three years of tax returns from 2008 to 2010, defrauding the government of some $960,000 in taxes, according to U.S. District Court records.
After Tusha and Weinberg began fighting over how to split the bribe money from TCN, Tusha switched to another “broker” identified only as “Person 2” in court papers. In 2009, that person set up a PNC account for Allrom and transferred nearly $1 million to Tusha, much of which went to purchasing his Forest Hill home, according to U.S. District Court records.
U.S. District Judge Terrance F. McVerry has scheduled sentencing for Sept. 16. Until then, Tusha remains free on a $10,000 bond.
On Tuesday, Tusha disputed the facts of the case. Despite pleading guilty to and agreeing to the facts in court, he told the Whig that the case was simply a matter of not paying taxes, which he blamed on the poor financial advisement of Weinberg. He also claimed that the projects did not have anything to do with Google, and were instead personal projects — an assertion that a spokeswoman for the U.S. Attorney’s Office Tuesday.
“My attorneys are actively working with the IRS for a resolution to the matter,” Tusha told the Whig.
Tusha also said that his wife is currently the owner/ operator of their wedding venue and that this recent plea agreement would have no effect on booked or future weddings at the Elk Neck venue.
The law provides for a total sentence of not more than five years in prison, a fine of up to $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 of the defendant.
This latest case isn’t Tusha’s first brush with federal prosecutors though. According to U.S. District Court for the District of Delaware records, Tusha was indicted for interstate transportation of stolen checks in 1999. He pleaded guilty in that case as well and was sentenced to 10 months imprisonment, three years of supervised release and was ordered to pay more than $130,000 in restitution.
On Tuesday, Tusha confirmed his plea in that case but called it “a dispute with his ex-wife over their family business.” denied