UPDATED Nov. 11, 2021, 12:17 p.m.: Eugene Lemay, a longtime Moishe Mana employee who led the moving company that gave the billionaire developer his start, has been indicted for tax evasion and conspiracy to defraud the IRS. Joel Lingat, the moving company’s former bookkeeper, has also been indicted. NJ.com first reported the news.
The indictment refers to the moving company as “Company-1,” which the Jersey City Times reported is Moishe’s Moving Systems. Prosecutors allege that Lemay, 61, evaded nearly $8 million in payroll taxes between 2010 and 2016 by misclassifying Moishe’s Moving workers as independent contractors.
He is accused of setting up a series of shell companies nominally owned by his close associates or family members, including his father-in-law and sister. Those companies employed people whom Lemay contracted with, but they were really Moishe’s Moving staff and Lemay should have paid the taxes required when workers are employees, authorities said.
“As alleged, these men, with others, went through extraordinary lengths to hide the money through a series of completely bogus companies,” said Thomas Fattorusso, an IRS special agent, in a press release announcing the indictments.
Lemay is also accused of ducking personal income taxes by receiving a large portion of his income through a shell company, GM3 Enterprises. He paid for personal expenses through GM3 and deducted them as business expenses on the company’s tax returns, according to the press release.
Lemay also headed up Mana Contemporary, a multi-city arts center that is part of Mana Common, the suite of neighborhood development companies and initiatives of which Mana is CEO.
Lemay has been placed on administrative leave pending the results of the investigation, according to a spokesperson for Mana Common.
Moishe Mana was not charged and denied knowing anything about how Moishe’s Moving was handling its finances.
“The indictment is not against Moishe Mana, Mana Contemporary or Mana Common. It is related to the moving company, which I have not owned for the last 20 years. Gene Lemay has not been the director of Mana Contemporary since 2016,” Mana said in a statement Thursday.
Lemay and Lingat are not the first Moishe’s Moving executives to be accused of tax trickery. Salman Rami Haim, the former president of Moishe’s Movers, pleaded guilty to payroll tax conspiracy in May 2019. Nissim Fadida, another former Moishe’s Movers president, pleaded guilty on Oct. 15, 2021, to participating in the scheme.
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Lemay began working for Mana in 1984, picking up spare jobs at Moishe’s Moving. The moving company was one of Mana’s first ventures and provided his introduction to real estate. By 1998, he had scooped up more than 1.5 million square feet in the New York metro area, largely warehouses and storage space for the moving business.
Mana Contemporary, which opened in 2012 as a 500,000-square-foot cluster of art studios and galleries in Jersey City, arose as a new type of art storage facility, where artists could work and mingle with collectors. It has since grown into a national operation with outposts in Chicago and Miami.
The legal line distinguishing a contractor from an employee can be blurry, a possible line of defense for the accused.
“There is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor,” reads an IRS guide for employers.
Instead, it comes down to the level of control an employer has over a worker: Can the firm tell the worker what to do and how to do it? Does the worker need to provide his or her own tools? After a holistic appraisal, employers are supposed to make a call that keeps them on the right side of the law.
Lemay, who did not respond to a phone call and could not be reached by email, faces up to 15 years in prison.
Correction: An earlier version of this article misstated the identity of the firm that the indictment referred to as Company-1. Also, Lingat did not work at Mana Contemporary.
This story has been updated with a statement from Moishe Mana.