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June 4, 2014

Former Hollywood Business Figure Arrested in Tax Conspiracy

Filed under: Federal Crimes Defense Attorney — fayarfa @ 1:52 am

LOS ANGELES – The former CEO of Axium International, Inc., which was a leading Hollywood payroll services company until its collapse in 2008, has been arrested on federal tax charges that allege he took millions of dollars of company funds and failed to report the income to the IRS.

John Visconti, 71, of Beverly Hills, was arrested Monday without incident by special agents with IRS - Criminal Investigation at a Los Angeles Superior Court facility where he had gone to appear on an unrelated matter.

Visconti was arraigned and the three-count indictment against him was unsealed during a hearing late Monday afternoon in United States District Court. Visconti entered a not guilty plea to the charges, and a trial was scheduled for July 29.

Axium was one of the largest payroll services companies serving the entertainment industry, at its height processing hundreds of millions of dollars in payroll for its clients. As the payroll services provider and employer of record for its clients, Axium regularly submitted payroll tax returns to the IRS and the tax authorities of several states. The filing of the tax returns regularly generated tax refunds. Axium collapsed in 2008, after revelations that it owed tens of millions of dollars in payroll taxes, which led to Axium’s lender foreclosing on its bank accounts. A Chapter 11 bankruptcy case for Axium, filed in January 2008, remains an active case.

According to the indictment, which was returned by a federal grand jury on May 28, Visconti and another Axium officer used a variety of mechanisms to divert millions from Axium. In some cases, Visconti and his co-conspirator allegedly pocketed tax refunds that should have gone to to Axium and its subsidiaries. The indictment alleges that Visconti and his co-conspirator opened secret bank accounts in the names of Axium and its subsidiaries in which to deposit the purloined refund checks.

The indictment further alleges that, for more than two years, Visconti and his co-conspirator took weekly cash payments from Axium that averaged $8,000. Furthermore, Visconti and his co-conspirator allegedly formed a construction consulting company that billed Axium for $570,000 worth of services and they concealed from Axium that they were profiting from the arrangement. And, Visconti arranged for about half of the net salary paid to a purported Axium employee – approximately $82,000 – to be cycled back to a bank account controlled by Visconti.

Despite diverting millions of dollars from Axium, Visconti reported none of the diverted funds on his federal income tax returns, the indictment alleges.

The indictment charges Visconti with conspiracy, tax evasion and filing a false tax return. If convicted of the three counts, Visconti would face a statutory maximum sentence of 13 years in federal prison.

During Monday’s hearing, a United States Magistrate Judge ordered Visconti freed on a $100,000 bond, but he will be subject to electronic monitoring during his pre-trial release.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.

The investigation into Visconti was conducted by IRS - Criminal Investigation.

CONTACT:        Assistant United States Attorney Angela J. Davis

Major Frauds Section (213) 894-3456

Central District of California (Los Angeles) / Release No. 14-069 / June 3, 2014

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