July 2, 2018

Tax fraud nets Newington insurance salesman 70 months in prison

A Newington insurance salesman who attempted to trick the IRS into refunding him $14 million was sentenced Friday to 70 months in prison, federal investigators said.

Terry DiMartino, 64, was convicted in March 2016 of one count of corruptly interfering with the due administration of the internal revenue laws, two counts of filing false tax returns and five counts of willfully failing to file tax returns, according to the U.S. Justice Department's Tax Division.

DiMartino was also sentenced to one year of supervised release and to pay more than $658,500 in restitution to the IRS, prosecutors said.

According to investigators, DiMartino earned millions of dollars in insurance commissions over the last decade after he failed to file accurate tax returns or pay the taxes owed selling insurance for several in-state insurers and brokers. DiMartino failed to file an accurate tax return or pay the taxes he owed since 1996, they said.

After being confronted by investigators, DiMartino tried obstructing the IRS by mailing false documents, including three false tax returns for the 2007 tax year, with one requesting a fraudulent $14 million refund.

He also submitted false and threatening letters to the IRS in an attempt to bypass its assessment, collection and investigation. DiMartino then sent threatening letters to insurance companies that were cooperating with the IRS investigation.

Meantime, DiMartino used nominee entities to divert his insurance commissions to hide assets to prevent the IRS from collecting on his tax liabilities.

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