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Robert C. Piscitello denies stealing money from his former employer, but he doesn't deny cheating on his taxes and failing to report $2.3 million in income.

On Friday -- the nation's tax-filing deadline -- the former business executive from the Town of Tonawanda was sentenced to two years in federal prison by U.S. District Judge John T. Elfvin.

Piscitello, 44, took a plea deal in January, admitting that he failed to report hundreds of thousands of dollars in income each year from 1999 to 2003. A state court lawsuit will now focus on a messy series of charges and counter-charges involving Piscitello's financial practices.

His former employers with Innovative Chemical Corp. claim Piscitello used the Internet to systematically embezzle money -- often taking more than $15,000 a week -- while working as controller for the Amherst-based company.

One of the company's former owners, Gary A. Robinson, said Piscitello's alleged thefts were so extreme that they resulted in cuts in job benefits for 80 workers and prevented the company from giving pay raises.

While officially making $55,000 a year, according to court papers, Piscitello bought at least three cars and numerous luxury watches, including seven Rolexes and two Cartiers. He also bought an antique boat, a cabin near Ellicottville and two vacation homes near Chautauqua Lake.

On Friday, Piscitello's attorney described the embezzlement accusations as "gossip," "hearsay" and "unproven allegations." He asked for probation for Piscitello.

"He expresses extreme remorse for the (tax) crime," said the defense lawyer, Alan F. Feuerstein. "(It is) the only crime he has admitted to in his entire life."

Piscitello said he had nothing to add to his lawyer's comments.

Robinson's former business partner, Thomas F.W. Gould, signed a court affidavit accusing Robinson of allowing Piscitello to take the money. According to Gould, Robinson "paid off" Piscitello for helping Robinson steal "millions and millions" from the company. Robinson denied the allegation.

In the late 1990s, Gould had a dispute of his own with the federal government. In 1999, he surrendered 36 tanks, armored personnel carriers, anti-aircraft guns, missile launchers and other military equipment to the government. Some of the equipment was stored at Innovative Chemical's Buffalo warehouse.

Gould said he was collecting the combat vehicles for a planned military museum, but U.S. Army officials said he illegally kept them in a "private collection" and used some of them in a construction firm he operated.

The new owners who took over the company last year also claim that Piscitello stole from them, before they fired him last May.

Feuerstein said the allegations about company finances will be litigated in state court.

Assistant U.S. Attorney Paul J. Campana said agents from the Internal Revenue Service and FBI believe the $2.3 million was "criminally derived," but he declined to comment further on the theft allegations.

Under his plea deal, Piscitello agreed to pay restitution for $648,000 in unpaid taxes. He forfeited 18 luxury watches, $100,000 cash, two vacation homes and 19 acres of vacant land in Chautauqua County.

In his plea agreement, Piscitello confirmed that he accessed Innovative's computers "from time to time" and "caused electronic fund transfers" to his own bank account in Virginia. But he did not admit to stealing money.

Piscitello formerly served as volunteer treasurer at his Kenmore church, and formerly sat on the board of trustees at Shea's Performing Arts Center.


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