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June 22, 2013

Middleton couple sue accountant for tax troubles

MIDDLETON — A Middleton couple who admitted to federal tax charges that sent the husband to prison and the wife to a halfway house have blamed their accountant for their predicament.

Joseph “Junior” Pingaro Jr. and Christine Scola claim in a lawsuit that their accountant, Paul Constantino, was the one who gave them the idea to keep all of their cash withdrawals from their scrap metal business under $10,000 — a practice, it turns out, that also can be viewed as the federal crime of “structuring.”

Federal law requires that transactions involving more than $10,000 be reported by banks and other businesses, a law aimed at preventing money laundering and other crimes.

But the couple claim in a lawsuit pending in Middlesex Superior Court that Constantino told them it was a good business practice to keep their withdrawals under $10,000, to avoid triggering an audit of their mostly cash scrap-metal business.

They claim they had no idea that what they were doing was illegal.

The pair owned J&J Metals in Roxbury and dealt mainly in cash.

Prosecutors charged them with falsely claiming that money they withdrew from business accounts was for business expenses, when the couple was living off the cash withdrawals and not reporting the income, some $1.4 million, according to court papers.

Structuring is considered a “general intent” crime, meaning that prosecutors didn’t need to prove that the pair knew what they were doing was illegal, only that they did it. So, the two, who were represented by top Boston defense attorneys Charles Rankin and Howard Cooper, struck a plea agreement with federal prosecutors.

Pingaro was sentenced last year to four years in federal prison, and Scola received six months in a halfway house and two years of probation. Both pleaded guilty to charges that they engaged in the crime of “structuring” by making the repeated withdrawals of just under $10,000.

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