New Jersey Construction Company Owner Pleads Guilty to Tax Evasion, Faces Serious Penalties

A New Jersey man, Joseph Caravella, pleaded guilty today to tax evasion, admitting to causing a nearly $2 million tax loss to the IRS. Caravella, a masonry company owner from Randolph, New Jersey, acknowledged evading employment tax penalties assessed against him.

From 2008 to 2016, the IRS imposed approximately $650,000 in Trust Fund Recovery penalties on Caravella for failing to pay federal employment taxes for his three masonry businesses. Rather than paying the penalties, Caravella attempted to evade them by transferring ownership of his companies to nominees and avoiding the use of personal bank accounts, which prevented the IRS from collecting the owed funds. Over the course of more than a decade, Caravella’s actions led to additional unpaid taxes, adding $1.2 million to his tax liability. In total, he caused a tax loss of $1.88 million.

Caravella will be sentenced in March 2024 and faces up to five years in prison, alongside potential restitution, supervised release, and financial penalties.

A Perspective from ConstructionOwners.com: A Call for Accountability and Transparency in the Construction Industry

From a construction owner’s perspective, this case underscores the critical need for greater transparency and accountability in financial management within the construction sector. Trust Fund Recovery penalties are designed to hold business owners personally responsible for ensuring that employment taxes are properly paid. ConstructionOwners.com advocates for implementing stricter internal controls and financial oversight mechanisms within construction companies to avoid the kind of tax evasion Caravella engaged in. By fostering a culture of compliance and responsibility, construction owners can safeguard their businesses against financial pitfalls and maintain the trust of their clients, employees, and regulators.