A Branchburg, N.J., financial planner has been arrested for evading federal income taxes and filing false income tax returns related to insurance product commissions.
Ronald Patetta, 56, worked as a financial planner and sold insurance products for different insurance companies between 2001 and 2005. During that time, the insurance companies paid him commissions of nearly $900,000, according to the U.S. Attorney for the District of New Jersey.
However, he reported to the IRS that he was paid nothing and that he owed nothing in taxes. He filed for bankruptcy in 2007 and listed as a liability $440,000 in past income taxes owed to the IRS, according to the federal grand jury indictment.
Prior to the bankruptcy filing, he filed false income tax returns and throughout the ensuing IRS investigation he took steps to obstruct the IRS, according to U.S. Attorney Paul J. Fishman.
Patetta sent letters and filed court papers challenging the legality of the IRS's conduct and its legal authority to perform its job, and threatened the IRS with legal action. He also sent cease and desist letters to the insurances companies, threatening them with legal action if they complied with the IRS in supplying requested information.
He is charged with five counts of tax evasion and five counts of filing false returns.