A former Washington County real estate developer was sentenced to 6 1/2 years in prison for tax evasion, mail and wire fraud.
Bartolomea J. Montanari, 58, was also fined $1.5 million in a special assessment for the taxes, interest and penalties owed, and an additional $100,000 in restitution.
The former Bayport business owner “willfully evaded” paying employment and excise taxes owed by him and his three businesses — St. Croix Development, Emlyn Coal Processing and Montie’s Resources — according to the U.S. attorney’s office in Minnesota.
U.S. District Court Judge Ann D. Montgomery said Wednesday at his sentencing that Montanari not only stole money, but did so repeatedly to finance an “incredibly flamboyant lifestyle.”
The investigation, conducted by the Internal Revenue Service, the U.S. Postal Inspection Service and the Minnesota Financial Crimes Task Force, focused on activity between 2009 and early 2012.
Montanari avoided paying more than $700,000 in federal taxes, investigators found. Among his tactics was the creation of a shell company, Bella Luca Properties LLC, that served no legitimate business purpose. Montanari transferred more than $1.1 million into Bella Luca’s bank account to avoid paying taxes, which he later used to pay personal expenses.
When the IRS attempted to collect taxes and penalties in December 2009, Montanari filed a fake financial statement with several fraudulent claims. For example, he omitted the fact that he owned several personal vehicles and denied the existence of the Bella Luca bank account, despite using it to receive his monthly income of $50,000 from two of his companies. He also lied about living in Bayport, Minn. when he had already moved into his new $1.4 million home in Knoxville, Tenn.
“Montanari not only evaded payment of taxes and defrauded his business partner, but he repeatedly lied to IRS investigators, pleading poor while living an extravagant lifestyle,” Assistant U.S. Attorney Melinda A. Williams said in a statement.
In addition to the fraud scheme, Montanari lied to his business partner and a financing company about the cost of a Caterpillar bulldozer he was purchasing. The financing company wrote a check to the bulldozer seller for $100,000 more than was needed — based on a false invoice produced by Montanari. When the seller notified him of the discrepancy, Montanari told the seller to write him a check for the difference. He then used that money as a down payment for his Tennessee house.
Montanari was indicted in May 2014 and found guilty by a federal jury last November.