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Dec 20, 2017 11:35 AMPublication: The Southampton Press

As Part Of Plea Deal, Beach Hut Co-Owner Will Pay $1.1 Million In Restitution For Unpaid Taxes

Beach Hut in Cupsogue Beach. KATE RIGA
Dec 20, 2017 11:35 AM

The co-owner of four Beach Hut bars—including the one at Cupsogue Beach—has been ordered to pay more than $1.1 million in restitution as part of a plea deal reached with prosecutors after authorities said he defrauded both the state and Suffolk County out of four years worth of sales and income tax.

Frederick Marsilio of Nesconset—listed in court documents as the part-owner of Beach Huts at Cupsogue Beach County Park, Smith Point County Park in Shirley, Tanner Park in Copiague and Venetian Shores Park in Lindenhurst, as well as Marchello’s Garden Grill in Smithtown—failed to pay $295,958 in sales taxes on $3.4 million of sales from March 1, 2012, to November 30, 2016, at his five restaurants, according to court documents.

In addition, prosecutors said Mr. Marsilio failed to report nearly $1.8 million of personal income, never paying the $127,783 he owed in income taxes, from January 1, 2012, to December 31, 2016.

In Suffolk County Criminal Court in Riverhead on Friday, December 15, Mr. Marsilio pleaded guilty to one count of fifth-degree criminal tax fraud, a misdemeanor, before Judge Stephen Braslow.

The $1.1 million restitution payment will be broken down into $945,851.66 to the New York State Department of Taxation and Finance, $131,557.83 to Suffolk County and $66,801.13 to the Town of Babylon.

Mr. Marsilio could not be reached for comment this week.

Mr. Marsilio’s crimes were detected after Suffolk Comptroller John Kennedy Jr. audited the Suffolk County Parks Department’s books after receiving myriad complaints—both in person and through the county’s fraud hotline—about suspicious activity at the Beach Hut locations.

“From what I was hearing, it was the wild west out there,” Mr. Kennedy said on Tuesday. “I’m just paraphrasing here, but I was hearing about high-priced drinks, a cash-only system and a reluctance to furnish receipts.”

Mr. Kennedy said much of the blame falls to the county’s Parks Department, stating that a lack of oversight allowed the years-long scan to continue.

“To subvert over $3 million in sales from six of seven seasonal places—meaning they only operate 12 weeks out of the year—means that in only 14 months, he subverted $3 million in gross sales,” Mr. Kennedy said. “That is objective evidence of a pervasive lack of oversight from county officials.”

Representatives from the Parks Department did not respond to requests for comment this week.

Jason Elan, a spokesman for Suffolk County Executive Steven Bellone, provided a written statement but did not respond to Mr. Kennedy’s accusations or address if the county will sever ties with the Beach Hut companies.

“If the comptroller has conducted an audit of an outside vendor, when he sends it to us we will review it and take the appropriate action,” Mr. Elan wrote in an email on Tuesday.

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A bar not paying their taxes? Shocking
By Pacman (273), Southampton on Dec 20, 17 2:47 PM
1 member liked this comment
Not going there anymore. Not supporting business that doesn't pay taxes. I pay mine.
By Marrrmin (17), Hampton bays on Dec 21, 17 4:33 PM
Oh boy, have I got a list for you.
By Fore1gnBornHBgrown (8265), HAMPTON BAYS on Dec 21, 17 4:43 PM
Just like the corrupt Suffolk County Government not to comment on wether they will sever relations with this man and his company. Seems like every vendor end of Suffolk County and Nassau County pertaining to food and beverage are crooked and corrupt. Just saying
By chief1 (2800), southampton on Dec 21, 17 11:27 PM
Suffolk at it's best...
By knitter (1941), Southampton on Jan 3, 18 6:15 PM
Loved the Beach Huts.. food was decent, great entertainment... music nightly all summer long at all locations, Friday nite car show at Meschut. Tens of thousands of long islanders will miss the Beach Huts!!
What a shame !!
Greed is NOT good!!
I pray a similar type business will take over, by a law abiding and tax paying business person!!
By eastendpets (1), Hampton Bays on Jan 21, 18 1:38 AM