43
Former state tax department employee in Youngstown indicted
By Denise Dick
YOUNGSTOWN
A former auditor in the Ohio Department of Taxation’s city office pleaded innocent earlier this week to conspiracy to commit wire fraud.
In a federal indictment unsealed this week, Stephen Varkony Jr. is accused of helping convenience-store owner Mohd Rawhneh underreport state sales tax. Varkony, of Leetonia, posted a $20,000 bond.
Rawhneh, 54, of Boardman, isn’t charged in the indictment, but he pleaded guilty last week in a related case to two counts of violating the Hobbs Act and one count of conspiracy to tamper with a witness, victim or informant.
Also in the related case, Atty. Scott Cochran, 43, of Austintown, and Atty. Neal Atway, 47, of Youngstown, are charged with two counts each of violating the Hobbs Act; two counts each of conspiracy to tamper with a witness, victim or informant; and one count each of making false statements to law enforcement.
Rawhneh’s sentencing is set for Aug. 14.
The convenience stores owned by Rawhneh for which Varkony is accused of filing the sales-tax returns are the Superette in East Liverpool, Drive Thru in Kent, Frank’s Drive Thru in Ravenna, Tiger’s Den Drive Thru in Howland, OH Food Market in East Liverpool and One Stop in Hanoverton.
“Rawhneh provided sales figures to Varkony that both Rawhneh and Varkony knew to be fabricated and not based on actual cash-register sales receipts,” the indictment says.
That led to the stores’ paying “substantially less in Ohio State sales tax than they would have been required to pay if the actual cash-register receipts” had been used, it says.
The Hobbs Act counts allege extortion by the wrongful use of actual or threatened force, violence or fear.
The Varkony indictment says that on some occasions, Varkony filed the sales-tax returns but on other occasions, Rawhneh had Varkony both “file and pay Rawhneh’s stores’ sales taxes to the State of Ohio using the electronic Tele-File System. Varkony had the bank-account routing numbers and account numbers for the convenience stores and filed the sales taxes as paid by entering the bank information during the Tele-File call placed from Varkony’s telephone,” the indictment says.
At regular periods between January 2009 and November 2012, the two men “caused interstate wire communications” to occur regarding filing the sales-tax returns.
“Neither Varkony nor Rawhneh disclosed to the ODT that the sales-tax information submitted on behalf of the stores was false, nor did they disclose that the stores underpaid the sales tax due and owing,” the indictment charges.
The indictment relays voicemails and phone conversations between the two men, discussing store proceeds and sales tax.
Cochran and Atway are charged with trying to extort money for Rawhneh from another convenience-store owner, Charles B. Muth, 42, of Canfield, a defendant in criminal cases, who was being represented by the two lawyers.
In a federal case, Muth got five months in prison for growing 100 marijuana plants in his residence.
In a state case, Muth was sentenced to 18 months in prison in a Dec. 28, 2011, shooting at the Boardman home of Rawhneh’s ex-wife, in which nobody was injured. At the time, Muth was having a business dispute with Rawhneh.
The February indictment says Rawhneh and Atway led Muth to believe that, unless Rawhneh received money and property from Muth and Muth’s stores, Rawhneh would appear at Muth’s sentencings and communicate facts to the courts that could result in Muth’s receiving harsher sentences, according to the federal indictment.