A Niagara County swindler who has already served time in state prison now faces the prospect of a federal prison term after admitting to a felony tax crime Monday.
Richard Muto, 53, of Lewiston, pleaded guilty to interfering with the administration of federal tax laws before U.S. District Judge Richard J. Arcara. The case stemmed from an investigation by the Criminal Division of the Internal Revenue Service.
According to Assistant U.S. Attorney John N. Kane, Muto obstructed the IRS by setting up and selling tax shelters that enabled 10 of his clients to avoid about $1.7 million in tax payments.
He faces a potential sentence in the range of three years when Arcara sentences him May 9. Investigators said the tax shelter crimes took place in the years 1996-2000.
Muto's attorney, E. Carey Cantwell, said Muto admitted to the crime but claims the impact of the crime was less than $1.7 million.
As Muto, who said he has a bad back, sat before the judge, several Niagara County senior citizens who were victimized in a Ponzi scheme that he previously was punished for sat in court with looks of disgust.
"It's hard for me even to be in the same room with him," Helen Schimschack, of Wheatfield, said of Muto. "He put my husband and I through a lot of stress. The money he took from us, we were saving to help our two grandchildren with their college educations. Now we can't help them."
Schimschack, a retired retail store worker, and her husband, Robert, a retired General Motors worker, declined to say how much money they lost to Muto but said it was substantial.
They said they know many other seniors in Niagara County who trusted Muto with their life savings and lost it.
Muto, formerly of Niagara Falls, was sentenced to two to six years in state prison in March 2004 after admitting to grand larceny and scheming to defraud investors.
"I'm sorry for getting people involved in something that did not work," Muto said during his 2004 sentencing.