Felony Fraud Charges Dropped Against Rye Couple

Felony charges against a Rye couple for alleged tax fraud will be dropped if the couple is able to pay back more than $90,000 in restitution by October.

Charles Principato and his wife Christine, of 549 Purchase Street, Rye, had faced a combined seven felony counts after the Westchester County district attorney said Christine failed to pay their taxes from 2004 - 2008. The D.A. also alleged Charles failed to file his own taxes in 2008 and Christine filed but didn't pay her liability in 2009.

All charges were dropped against Charles Principato on June 28 in Harrison court. His wife will plead guilty to a reduced charge of attempted income tax fraud—an A misdemeanor—if the remaining $92,000 in restitution is paid by Oct. 18. She would serve no jail time under the terms of the plea deal and would accept a one year conditional discharge.

After he was informed of the investigation, Charles Principato submitted and paid his wife's returns from 2004 to 2008, which totaled $79,000, according to a statement from the district attorney's office.

The couple also had to pay $25,000 in restitution at their court appearance in June, according to court records.

Charles Principato said this week that he and his wife will make the full payment before October, adding that he intended to file his taxes but financial hardship forced the couple to put off making payments.

"It is illegal to not file your taxes, we understand that," he said. "The intent to file was there."

Christine Principato was originally charged with two counts of third-degree criminal tax fraud—class D felonies—and two felony counts of repeated failure to pay income tax returns. Charles Principato had faced one count of criminal tax fraud, two counts of failure to pay income tax returns—all also felonies—and one criminal tax fraud violation, a misdemeanor. 

"The bottom line is he is not guilty of any felony, nor any charge of any kind," said Andrew Panken, an attorney representing Charles Principato.