New York (WRGB) — New York Attorney General Letitia James announced the recovery of more than $4.7 million from the owners of two New York City truck rental companies and their accountant following an investigation into a decade-long sales tax evasion scheme.

According to the Attorney General’s Office, the owners of Able Rentals, Inc. and Abarn Equipment Corp., Myron and Martin Schulman, underreported taxable sales from 2014 through 2024 and pocketed sales taxes collected from customers on more than $15 million in revenue. Their accountant, Howard Zapken, founder of the accounting firm Zapken & Loeb, was also found to have participated in the scheme.

Investigators say the businesses avoided paying more than $1.3 million in sales taxes by drastically understating their taxable sales. Instead of using full sales records, the companies calculated taxes based only on select cash deposits, excluding most credit card transactions, which represented the majority of their sales.

For example, in 2018 the companies reported about $250,000 in taxable receipts, while their point-of-sale system recorded nearly $1.9 million in payments received that year, according to the investigation. Officials say Zapken warned the owners that the reported figures were too low but continued filing the returns.

As part of the settlement, the Schulmans will pay $3,972,419. Zapken has repaid $826,660.61. A whistleblower who alerted authorities to the scheme will receive $794,483.80 from the recovered funds.

The settlement also requires an independent licensed accountant approved by the Attorney General’s Office to certify the companies’ sales tax returns for the next five years. Zapken agreed not to sign, prepare or file New York state tax returns for anyone other than his immediate family during that time.

Attorney General James said in a statement;

Businesses that cheat on their taxes are depriving our state of the funding that provides health care, education, and other critical services to New Yorkers. This case sends a clear message to businesses and their accountants: my office will not tolerate tax evasion schemes, and we will hold you fully accountable.