2 Absecon, NJ, Men Admit to IRS Fraud Tied to Atlantic City Motels

Two men from Atlantic County are potentially facing several years behind bars after admitting to conspiring to defraud the IRS by filing false tax returns that concealed their motels’ cash payroll.

Just before the new year, 37-year-old Dhruvesh Patel and 36-year-old Mayank Ray, both of Absecon, each pleaded guilty in federal court to one count of conspiring to defraud the IRS.

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How the IRS Fraud Scheme Worked

Federal authorities say the pair operated two motels in Atlantic City, which "generated substantial gross receipts from customers who paid for their motel rooms in cash." As part of the conspiracy, Patel and Ray used a large portion of that cash to pay employees in cash, and they kept some for personal use.

Patel and Ray caused to be prepared and filed with the IRS false employment tax returns that concealed the cash wages and false individual income tax returns that underreported the income they earned from the motels. Patel admitted that the conspiracy and his relevant conduct caused a loss greater than $250,000, and Ray admitted that the conspiracy and his relevant conduct caused a loss of approximately $129,512.

Potential Prison Time

Both men are facing up to five years in prison and a fine of up to $250,000 when they are sentenced on May 11th.

Chris Coleman, a South Jersey native, is the brand manager for WPG Talk Radio 95.5 FM and afternoon on-air personality on WPUR Cat Country 107.3 in Atlantic City, NJ. He joined the station in February 1998 and covers news, events, and stories of interest across Southern New Jersey for Townsquare Media. Story tips can be sent to chris.coleman@townsquaremedia.com .