A former Washington County real estate developer and business owner has been indicted by a federal grand jury in Minneapolis on charges of tax evasion and mail and wire fraud.
Charges filed last week against Bartolomea J. Montanari, 57, formerly of Bayport, say he filed false tax documents and tried to hide thousands of dollars in income in part by creating a shell company from which he drew money for personal expenses.
According to the charges, from 2009 to 2012, Montanari failed to pay employment and excise taxes, along with Trust Fund Recovery Penalties (TFRPs) or fees that are charged to businesses that fail to pay employment taxes such as Social Security and Medicare. The TFRPs were owed by either Montanari or three businesses he controlled: St. Croix Development Group LLC in Oak Park Heights; Emlyn Coal Processing in Kentucky, which went through a Chapter 11 bankruptcy in 2011; and Montie’s Resources LLC, also based in Kentucky, which was liquidated in a Chapter 7 bankruptcy proceeding.
The indictment alleges that Montanari failed to pay more than $700,000 in outstanding taxes and TFRPs to the federal government. It also says that Montanari transferred more than $1.1 million into a shell entity called Bella Luca Properties LLC, which had no business purpose but from which he drew $50,000 a month for personal expenses.
When the Internal Revenue Service tried to collect the taxes and TFRPs, the charges say, Montanari “made numerous misrepresentations” to the agency, including saying he lived in Bayport when he had moved to Knoxville, Tenn., and put a $400,000 down payment on a $1.4 million home. He also failed to disclose his employment status, the Bella Luca bank account and the number of vehicles he owned, the indictment says.
The mail and wire fraud charges against Montanari stem from the purchase of a bulldozer for Montie’s Resources. According to the charges, Montanari told his business partner and the financing company that the machine’s purchase price was $275,000 when the seller was actually asking $175,000. As part of the scheme, Montanari got his partner to sign and issue a personal guaranty to the seller for the phony price.
When the seller received the payment, he notified Montanari of the discrepancy, the charges say. But Montanari told the seller to send him a $100,000 check rather than return the overpayment to the financing company.