NEW YORK — Jeweler Fred Leighton Ltd. pleaded guilty to failing to collect New York City and State sales taxes, and paid $1 million in fines in tax restitution.
The plea was entered Tuesday before Acting Supreme Court Justice Michael Ambrecht to one felony count of failure to collect sales tax and one felony count of falsification of business records. Leighton specializes in vintage and estate jewelry from the 19th and 20th centuries.
“We are pleased to put this matter behind us and move forward with our business,” a spokeswoman for Fred Leighton said.
Manhattan District Attorney Robert Morgenthau’s office said an investigation uncovered instances in which the jeweler allowed some customers to walk out of its 773 Madison Avenue store with their purchases, even though false shipping documents were created to make it look as if the items had been shipped out of state. In other examples, the jeweler permitted customers to return purchases to the store for shipment out of state to avoid paying sales tax. The D.A.’s office said items bought ranged from a diamond Cartier watch and cuff links for $68,500 to a 120-carat diamond necklace costing $335,000.
Over a two-year period, one New York customer was allowed to take more than $1.3 million in jewelry out of the store, which included a pair of diamond platinum bracelets, an emerald and yellow gold ring and a gold and diamond bracelet. False shipping records were generated to indicate that the goods were shipped to a Florida residence, even though nothing was ever shipped, the D.A.’s office said.
Another Manhattan customer purchased over $1.4 million in jewelry — ranging from 19th-century diamond necklaces, earrings and bracelets — and was allowed to take the pieces out of the store without paying sales tax on the pretext that they would be returned at a later date for shipment to Connecticut. The D.A.’s office said the same customer in other instances paid the sales tax, only to have the taxed amount refunded when the pieces were returned to the store for shipment to Connecticut.
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