Feb 7, 2006 8:28 pm US/Eastern
Scores Execs Indicted For Tax Evasion
Accused Of Siphoning Money To Phony Companies
NEW YORK (AP) ―
Customer complaints of overcharges at the Scores topless club led to the arrests Tuesday of three club officials and five companies on charges that they dodged taxes on $3.1 million.
The three individuals surrendered Tuesday to the Manhattan district attorney's office after being indicted on charges that include offering a false instrument for filing and filing false business records -- the tax returns.
District Attorney Robert Morgenthau said the defendants are Richard K. Goldring, 36, of Watchung, N.J., Harvey B. Osher, 38, of Matawan, N.J., and Cheryl Osher, 25, of Brooklyn, who is Harvey Osher's niece. They face up to four years in prison if convicted.
Morgenthau said the defendants ran their scheme from 2001 through 2003. Goldring used some of the money to fix up his New Jersey house and buy jewelry, while Osher used the money to finance a business that failed, the district attorney said.
Morgenthau said the Scores probe began with customers' complaints of credit card overbilling at the club, but no charges have been filed regarding those allegations.
The overcharge investigation has run into difficulty because "there are not a lot of willing victims who want to cooperate," the district attorney said. "They are not eager to come back from St. Louis or wherever."
At least three patrons filed lawsuits in the past two years saying Scores gave them credit card tabs that were bloated by tens and even hundreds of thousands of dollars.
One patron sued the club after he got a $28,000 bill and another disputed $129,000 in charges. The most notorious case involved Robert McCormick, former chief executive officer of St. Louis-based Savvis Inc., who said he was charged $241,000 after he had actually run up a tab of about $18,000 in one night.
Meanwhile, Morgenthau said, investigators found "a massive tax evasion scheme by managers and owners of the nightclub." He said the "simple and corrupt" scam involved the payment of money by Scores to dummy companies as business expenses, and the dummy companies paid the personal expenses of Goldring and Osher.
Morgenthau said Scores and the dummy companies claimed the various payouts as business deductions and in this way illegally reduced the amount of taxable income they reported. "All of the deductions were phony," the district attorney said.
Morgenthau said the five companies named in the indictment include the three dummies -- DDM Management Corp. of Brooklyn, T&O Consulting Corp. of Manhattan, and Interactive Business Concepts Inc. of Watchung N.J. Also named are the two Scores licensees in Manhattan -- Scores Entertainment Inc. and 333 East 60th Street Inc.
Cheryl Osher, a Scores bookkeeper, signed tax returns for one of the dummy companies, Morgenthau said.
Bruce Kato, assistant deputy commissioner for the state Department of Taxation and Finance, estimated the amount of tax due on $3.1 million was about $200,000.
The defendants were to be arraigned later in Manhattan's state Supreme Court. Their lawyers were not immediately available for comment.
Harvey Osher posted $10,000 bail Tuesday afternoon and was released. Cheryl Osher and Goldring were released on her own recognizance.
(© 2006 CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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