OWE & WOE
Caribbean fest firm hit for back taxes, debts
A NONPROFIT that runs youth programs and has an award-winning band that marches annually in the West Indian Day Parade is being investigated for not paying federal and state taxes, the Daily News has learned.
Sesame Flyers International, which has held contracts with the city for decades, owed more than $1 million in back taxes to the feds and state until it reached a deal with the taxmen last fall.
The giant debts spurred the city Department of Investigation to audit the nonprofit’s finances over the past five years, according to city records and interviews with Sesame officials. The probe began in December 2016, but it’s still open.
Sesame is accused of owing other debts as well.
A Brooklyn business that makes bejeweled costumes for the parade filed a lawsuit against Sesame in the spring, accusing it of owing it more than $79,000.
The owners of Stronjeh Creations say in the Brooklyn Supreme Court lawsuit that they made costumes before last year’s West Indian Day celebration that Sesame then sold. But Stronjeh was never paid, according to the lawsuit.
“They owe us a large amount of money,” said Akin Ross, one of Stronjeh’s owners. “I can see why they don’t want to pay us because they owe a lot of people money.”
Ross said he worked for Sesame for 10 years, including as a teacher’s assistant in an afterschool program. His company has made costumes for Sesame for the past six years, he said.
Ross said each year after the parade Sesame would need six months to pay Stronjeh the money for its costumes.
Ross’ lawsuit claims that he was injured during last year’s parade also when security for Sesame pulled him off a float and tackled him. Sesame officials said that Stronjeh Creations failed to produce costumes before last year’s parade. They also said Ross was the instigator in the incident during last year’s festival. “They didn’t produce the work and they tried to sabotage the band,” Curtis Nelson (photo), the executive director of Sesame, said of Stronjeh. Nelson and Sesame’s board chairman, Raymond Luke, said that the nonprofit got behind in its payroll taxes in the past few years because their city funding was reduced in 2011 due to the recession. Nelson said the IRS and the state Taxation Department reduced their tax arrears from more than a million to under $110,000 last fall. In return, Sesame agreed to pay the debt within two years, Nelson said.
Sesame provides year-round youth initiatives, including summer employment for teens and Caribbean culture programs. Some of the teens get paid to make costumes during the summer before the parade.
A former director at Sesame who spoke to The News on the condition of anonymity said that Sesame’s financial problems went beyond back taxes. She said that employees frequently did not get paid during the summer months before the parade.
Despite the DOI probe, the city Department of Youth and Community Development gave two contracts worth $276,000 to Sesame that started on July 1.
“Sesame Flyers has established a payment plan with the federal and state tax authorities and the organization was current on its payments at the time of contract award and registration,” said DYCD spokeswoman Dayana Perez.