Cuomo Busts Alleged Tax Cheat: Owner of Popular Clothing Stores Arrested for $1.5 Million Fraud

Attorney General Andrew Cuomo has announced the arrest of David Cohen, the owner of seven popular Manhattan (New York County) clothing stores including Mystique Boutique (547 Broadway, 324 Fifth Avenue, and 412 Broadway), Madness Boutique (305 Canal Street), Exstaza (491 Broadway) and Amsterdam (454 Broadway and 365-367 Canal Street). Beyond the arrest, AG Cuomo is seeking $1.5 Million in unpaid wages and damages due to Mr. Cohen’s alleged scheme of failing to pay proper wages to his employees and failing to report proper taxes.

A defiant AG Cuomo stated:

“In this case, workers were not only ripped off but were also intimidated to make sure they stayed quiet. All workers deserve fair pay and have a right to stand up for themselves. Today’s civil and criminal charges should send a strong message: No one is above the law.”

AG Cuomo’s calculation that employees are due $1.5 million is based on his office’s allegation that 150 employees were forced to work ten or more hours a day without any overtime compensation. Compounding his potential problems, prosecutors claim that Mr. Cohen offered $50,000 to workers to find out who was cooperating with the investigation while other employees were threatened not to cooperate.

As a result of his alleged failure to pay proper wages, falsifying of tax records and threatening of employees, Mr. Cohen is charged with nineteen counts of both Falsifying Business Records in the First Degree and Offering a False Instrument for Filing. These offenses are “E” felonies punishable by up to 1 and 1/3 to 4 years in state prison. Additionally, Mr. Cohen faces numerous misdemeanors, punishable by up to one year in jail, including Tampering with a Witness and Failure to Pay Wages.

Crotty Saland PC is a criminal defense firm located in New York. Founded by two former Manhattan prosecutors, Crotty Saland PC represents clients in white collar criminal actions throughout the New York City region.

Posted in:
Updated: