The opinion of the court was delivered by: LEONARD D. WEXLER
Defendant Angelo Favarolo ("Angelo") was convicted after a jury trial on November 18, 1985 and was sentenced on May 17, 1988, to a term of imprisonment of seven years, execution of which was suspended, five years probation, 300 hours community service and a $ 100,000.00 fine. Between May of 1988 and this date, Angelo paid a total fine of $ 11,500.00. As of October 21, 1993, the balance owing to the government on the fine, with interest, and after allowances for payments made by Angelo, is $ 16,858.57.
The United States Probation Department submitted a Violation of Probation petition to the Court recommending that Angelo be found guilty of violating his probation for the following reasons: (1) for failing to pay his fine after repeated requests; (2) for admittedly associating with criminals; (3) for filing fraudulent bankruptcy papers with the U.S. Bankruptcy Court; and (4) for defrauding the Court by not making payments on his fine.
This Court conducted hearings on July 20, 1993; September 23, 1993; September 29, 1993; October 1, 1993 and October 12, 1993, and now makes the following findings.
Angelo and his wife, Ernestina Favarolo, sold their home at 1010 Bellmore Road, Bellmore, New York to their son, Salvatore, for $ 250,000. The sale took place in August of 1987, which was prior to Angelo's May 17, 1988 sentencing but after his November 18, 1985 conviction. Angelo and his wife continued to live in the home after the sale.
Angelo claims to have received $ 25,000 cash and a check for $ 41,000 for the sale. The $ 41,000 check was from a corporation known as Giusalton Enterprises, Inc. ("Giusalton"), a corporation wholly owned by Angelo. The check, however, was signed by his son, Salvatore. Angelo's 1987 and 1988 tax returns show no profit or loss from the sale of the home and list his son Salvatore as a dependent. At the time of the sale, Salvatore was in his early twenties and single and this Court was not presented with any evidence explaining how Salvatore obtained the money to purchase the home. No part of the $ 25,000 cash or the $ 41,000 check went to the government. Moreover, in 1989, Angelo received $ 35,000 from Giusalton to make mortgage payments to Dime Savings Bank for the 1010 Bellmore Road property in which Angelo and his wife were living and which he had allegedly previously sold to his son Salvatore.
B. Transfers Through Corporations
Angelo is the sole owner of the following corporations: Multifreeze, Inc. ("Multifreeze"), Giusalton and 60 M. Realty Corp. ("60 M"). In addition, Angelo is the controlling partner of Sillee 60 M Realty Corp. ("Sillee"). Finally, an entity known as Mosuki Corp. ("Mosuki") was incorporated in October 1991 with all shares going to Angelo's two sons, Anthony and Salvatore. Upon the two sons's receiving the shares, they immediately endorsed the power of transfer to Angelo but the transfer was not recorded and is still in effect. From the evidence offered, Angelo controlled Mosuki and is in fact the owner.
In December 1991, Multifreeze sold inventory to Mosuki for $ 206,590.89. Multifreeze's records failed to show assets from that sale. In 1992, Angelo transferred Giusalton to Multifreeze without consideration. On July 10, 1992, seven months after the sale for $ 206,590.89, Multifreeze filed for bankruptcy under Chapter 7. Multifreeze's bankruptcy petition failed to show: (1) that Multifreeze was the owner of Giusalton, which Multifreeze acquired in 1992; (2) the assets of the sale to Mosuki for $ 206,590.89 which occurred seven months earlier; (3) a boat owned by Multifreeze valued at $ 73,500, which Angelo continued to use and control even after the bankruptcy filing.
On August 31, 1989, Angelo, through the Sillee partnership, purchased 30 Old Dock Road in Yaphank for $ 720,000, with $ 70,000 down. Angelo was sent a legal bill dated September 12, 1989, for $ 3,300 to cover the closing costs for this transaction.
On February 9, 1993, Angelo, again through Sillee, transferred the 30 Old Dock Road, property to 60 M without consideration. That same day, the same property was transferred by 60 M to Mosuki, again with no consideration. On April 27, 1993, Angelo, on behalf of 60 M filed for bankruptcy under chapter 11 and failed to report that it transferred the 30 ...