3/29/95 Phila. Inquirer B01 1995 WLNR 2202838
Philadelphia Inquirer (PA) Copyright Philadelphia Newspapers Inc. 1995 March 29, 1995 Section: LOCAL
JEWELER CHARGED WITH TAX EVASION, LAUNDERING FUNDS\BARRY SABLE IS ACCUSED OF HIDING $2.03 MILLION IN INCOME\AND SELLING JEWELRY FOR CASH FROM DRUG DEALS. Joseph A. Slobodzian, INQUIRER STAFF WRITER Barry Sable, the diamond authority, has gotten into trouble with the IRS, the income tax authority. Sable, 43, the owner of a jewelry store at 735 Sansom St., was indicted yesterday by a federal grand jury on tax evasion and money-laundering charges. U.S. Attorney Michael R. Stiles said that Sable was accused of skimming money from cash sales to hide about $2.03 million in income his store received from 1988 through 1992. During that period, Sable filed tax returns listing a reportable income of $20,000 to $30,000 each year when he was actually earning about $300,000, Stiles said. Sable also was accused of money-laundering, including the sales of a 3.75-carat diamond ring for $21,000 in cash and a pair of three-carat diamond stud earrings for $16,000 in cash. In both cases, the indictment alleges, Sable knew the purchases were made by people using cash from illegal drug deals. Sable's attorney, F. Emmett Fitzpatrick Jr., said Sable will contest the charges at trial. "Barry is a legitimate businessman, and he denies any implication that he evaded income taxes or was involved in money-laundering," Fitzpatrick said. Richard L. McCleary, district director of the Internal Revenue Service, said the Sable case resulted from an IRS focus on tax evasion among retailers. McCleary estimated that 45 percent of the $100 billion the government loses annually to tax evaders involves retail business owners.
"We will continue to aggressively pursue unreported income," McCleary said. "We owe that to the majority of taxpayers, who pay their fair share on a yearly basis." Sable, of Sixth and Locust Streets, is the latest of a group of Center City jewelers to face federal prosecution. Last year, jewelers Nicholas Balestra Sr. and Nicholas Balestra Jr. and Matthew Monaco, one of their salesmen, pleaded guilty to violating tax and currency reporting laws. They were fined and sentenced to short periods of home confinement or probation. Jeweler Robert Cott was sentenced by a federal judge in September to almost six years in prison after pleading guilty to charges of conspiracy and receiving stolen property involving a "smash-and-grab" robbery ring that stole $2 million of luxury items from fellow jewelers in five states. If convicted on the money-laundering charge, the most serious count on which he was indicted, Sable could face a prison term of 46 to 57 months, according to Stiles. Two of the money-laundering counts involve incidents in July 1991 relating to the 3.75carat ring and the diamond stud earrings. The indictment also details a third money-laundering count involving a $14,380 cash sale of a gold Rolex watch and diamond ring on July 15, 1992 - this time to an undercover agent, who allegedly told Sable that his money came from drug trafficking. The indictment alleges that Sable and some of his workers targeted certain cash sales for skimming. These cash sales were written on "Abby slips" - a purported code Sable named after his bookkeeper. Once the cash was skimmed, the indictment continues, the Abby slips and the original inventory records for the jewelry were destroyed. The cash from the skim was allegedly used to pay three unnamed Sable employees, who in turn omitted these payments from their personal tax returns. Stiles said none of Sable's employees were being charged "although we are aware that there are amended tax returns being filed." Sable, who on billboards and radio ads portrays himself as "The Diamond Authority," has been under a cloud since December 1992, when IRS agents entered and searched his store on Jewelers' Row. The indictment is the latest of Sable's legal troubles. In August, three women who formerly worked for Sable sued him in federal court for sexual discrimination and harassment, saying he paid women employees less and regularly made inappropriate sexual comments to them. That case is scheduled for trial on May 3 before U.S. District Judge Stewart Dalzell.