MEMORANDUM & ORDER On January 5, 2023, Scott Koeppel (“Defendant”) pled guilty to Counts One and Two of a two-count Information charging him with one count of Willfully Failing to Collect and Pay Taxes, in violation of 26 U.S.C. §7202, and one count of Willfully Failing to File a Tax Return, in violation of 26 U.S.C. §7203. The Court now sentences Defendant and provides a complete statement of reasons pursuant to 18 U.S.C. §3553(c)(2) of those factors set forth by Congress in 18 U.S.C. §3553(a). For the reasons discussed below, Defendant is hereby sentenced to 3 months of imprisonment, to run concurrently on each count, to be followed by 1 year of supervised release, restitution in the amount of $688,364.96, a $125.00 mandatory special assessment, and a $25,000.00 fine. DISCUSSION I. Background Scott Koeppel (“Defendant”) is the owner and operator of Sharp Mechanical, Inc. (“Sharp Mechanical”), a Long Island-based company that provides heating, ventilation, and air conditioning (“HVAC”) services. Presentence Investigation Report, ECF No. 13, 4. Sharp Mechanical does business and employs individuals within the Eastern District of New York. Id. As an employer, Sharp Mechanical has a duty to collect, truthfully account for, and pay to the Internal Revenue Service (“IRS”) Federal Insurance Contributions Act (“FICA”) taxes pursuant to Title 26 of the United States Code. Id. 5. Employers also have a duty to file an Employer’s Quarterly Federal Tax Return (Form 941). Id. As the owner and operator of Sharp Mechanical, Defendant was required to collect, truthfully account for, and pay FICA taxes. Id. From 2016 to 2018, Defendant engaged in a fraudulent scheme to underreport earnings and cash wages paid to Sharp Mechanical employees. Id. 6. During this period, Defendant cashed business receipt checks at a commercial check casher and failed to report those amounts on behalf of the business. Id. Defendant then used that cash to pay employees, failing to withhold, account for, or pay any federal income or FICA taxes to the IRS. Id. As a result, Defendant filed false Form 941s which underreported the gross wages Sharp Mechanical paid to employees and the number of employees at Sharp Mechanical, resulting in a total of $390,479.10 in unpaid FICA taxes. Id. Also during this period, Defendant failed to file Individual Income Tax Returns (Form 1040s), which resulted in the IRS incurring a tax loss of $297,886.00 based on Defendant’s failure to pay individual income taxes. Id. 7. In total, the IRS suffered a loss of $688,364.96 due to Defendant’s failure to pay FICA and personal taxes. Id. 8. The Court hereby sentences Defendant and sets forth its reasons for Defendant’s sentence using the rubric of the 18 U.S.C. §3553(a) factors pursuant to 18 U.S.C. §3553(c)(2). II. Legal Standard 18 U.S.C. §3553 outlines the procedures for imposing a sentence in a criminal case. A sentencing court must also consider the Sentencing Guidelines in addition to the seven factors listed in 18 U.S.C. §3553(a) when making a sentencing decision. The Court has done so in this case. The Sentencing Guidelines are merely advisory in light of the Supreme Court’s decision in United States v. Booker, 543 U.S. 220, 264 (2005). Nevertheless, the Guidelines range is the “starting point and the initial benchmark” for a court evaluating a criminal sentence. Gall v. United States, 552 U.S. 38, 49 (2007). “[A] district court should begin all sentencing proceedings by correctly calculating the applicable Guidelines range.” Id. In this regard, the Guidelines provide “the framework for sentencing” and “anchor…the district court’s discretion.” Molina-Martinez v. United States, 136 S. Ct. 1338, 1346 (2016) (internal reference and quotation marks omitted). If and when a district court imposes a sentence outside of the Sentencing Guidelines range, the court “shall state in open court the reasons for its imposition of the particular sentence, and…the specific reason for the imposition of a sentence different from that described” in the Guidelines. 18 U.S.C. §3553(c)(2). The court must also “state[] with specificity” its reasons for so departing or varying “in a statement of reasons form.” Id. “The sentencing court’s written statement of reasons shall be a simple, fact-specific statement explaining why the guidelines range did not account for a specific factor or factors under §3553(a).” United States v. Davis, 08-CR-0332, 2010 WL 1221709, at *1 (E.D.N.Y. Mar. 29, 2010) (Weinstein, J.). This Court has considered the applicable Guidelines range as well as the seven factors listed in Section 3553(a). It addresses each in turn consistent with United States v. Crosby, 397 F.3d 103, 112 (2d Cir. 2005). III. Analysis The Nature and Circumstances of the Offense and the History and Characteristics of the Defendant The first §3553(a) factor requires the Court to evaluate “the nature and circumstances of the offense and the history and characteristics of the defendant.” 18 U.S.C. §3553(a)(1). 1. Family and Personal Background Defendant was born on January 28, 1964, in Brooklyn, New York to the marital union of Ellis and Francis Koeppel. PSR 31. Defendant grew up in a middle-income household and reported he had a “good and happy childhood devoid of any forms of abuse.” Id. 33. However, defense counsel qualifies Defendant’s characterization, explaining Defendant actually grew up in “a troubled household, fraught with domestic strife” due to his father’s gambling addiction and infidelity. Def. Mem. at 6-7. Defendant’s father is a retired detective with the New York City Police Department and is in good health. PSR 31. Defendant’s mother is also healthy, and is the caregiver for Defendant’s brother, who is disabled due to a drug overdose he suffered in 2000. Id. 32. According to defense counsel, Defendant is and has been the primary source of financial support for his brother and mother for decades. Def. Mem. at 5-6. Defendant also has a sister, who is in good health. PSR 32. Defendant reported he shares close relationships with his parents and sister but has not advised them of his instant conviction. Id.
