A tax accountant has been indicted on charges he helped then-state Senator Brian Joyce and his law business bilk the government out of more than $1 million dollars in federal taxes.
John H. Nardozzi, 66, conspired with Joyce to defraud the IRS from 2011 through 2014 by deducting more than $2 million in personal expenses and calling them legal fees of his corporation, Brian A. Joyce Attorney at Law PC, according to an indictment unsealed Monday.
Nardozzi, a Joyce campaign donor, allegedly helped the former Milton Democrat misclassify $2,268,520 as business expenses, when the money went to his children’s tuition, a trip to Aruba, home repairs, clothing purchases, house cleaning, and more.
The amount of taxes the firm owed for these deductions was $850,748, according to the indictment. The amount actually paid was $56,766.
The indictment provides a fuller picture of the former assistant senate majority leader’s alleged corruption scheme, which prosecutors say netted him about $1 million since 2010. Joyce allegedly extorted a Jeep from a Milton developer and collected more than $100,000 in phony legal fees — and hundreds of pounds of free coffee from a Dunkin’ Donuts store owner — in exchange for using his influence to help them.
According to his indictment, Nardozzi helped prepare taxes for Joyce and his wife, Joyce’s law firm as well as a shell company, Windswept LLC, set up for Joyce to collect commissions from an energy broker, Power Management. Joyce’s spending habits “resulted in cash flow and liquidity issues for” the law firm, the indictment stated.
Nardozzi pleaded not guilty Monday in federal court in Worcester and was released on a $50,000 bond. His next court appearance is scheduled for March 12.
Neither Nardozzi nor his lawyer, Dennis Kelly, could be reached for comment. Joyce’s lawyer, Howard Cooper, declined comment.
Joyce faces a separate federal indictment on charges of taking about $1 million in bribes and kickbacks that he laundered through his law office, according to a 102-page indictment made public last month. Prosecutors launched the investigation of Joyce after a series of the stories in The Boston Globe in 2015 and 2016 raised questions about Joyce’s mingling of public and personal business.
Joyce, who now lives in Westport, is charged with mail fraud, corruption, money laundering, and embezzlement, among other crimes. He is currently free on $250,000 bond, court records show.
The government recently took out on a mortgage on his Canton law office as security on the bond, land records show.
According to Monday’s indictment, Joyce failed to report $100,000 in profit from the law firm in 2014 — allowing him to avoid paying at least $15,000 in taxes. He listed another $56,209 in profits as legal fees.
The accountant also helped Joyce claim that his wife, Mary, worked for his law office, though she didn’t, prosecutors said. By doing this, the couple allegedly deducted $268,257 more than they were entitled to invest in individual retirement accounts.
The couple spent $471,250 to buy stock in a company, Energi, and falsely claimed the money came from a tax-free rollover of their individual retirement accounts, according to the indictment.
Both Joyces withdrew money from their retirement accounts and should have been subject to fees and taxes because they were under 59½ years old, prosecutors said. But with Nardozzi’s help, the couple allegedly avoided paying the government $208,100.
The Globe has reported that Joyce actively worked on Beacon Hill to help Energi, a Peabody business that insures energy companies. He pushed legislation in 2013 and 2014 that the company was advocating for. He also met with state insurance regulators on Energi’s behalf.
But Joyce never disclosed his ties to the company and denied to the Globe and the state Ethics Commission that he ever took official actions to benefit Energi, whose officials are now cooperating with prosecutors., according to Energi’s lawyer, Brian Kelly.
According to the Nardozzi indictment, Joyce bought the Energi stock using a home equity line of credit and approximately $395,125 he and his wife withdrew fraudulently from their individual retirement accounts.
Nardozzi didn’t just sign Joyce’s tax returns as the tax preparer, he was heavily involved in tax planning, according to e-mails contained in the indictment.
One e-mail chain contained the subject line: “The Brian A. Joyce Empire,” that detailed the Joyce law firm’s profit and losses. Another e-mail detailed how the accountant would classify profits Joyce received from the firm as “legal expenses,” and therefore deductible.
Nardozzi is charged with one count of conspiring to defraud the Internal Revenue Service and eight counts of aiding and assisting in the filing of false fax returns. He faces up to five years in federal prison if convicted of conspiracy and up to three years if convicted of aiding and assisting in filing false tax returns. He also faces fines of up to $350,000.
Joyce decided not to run for reelection in 2016 and moved out of Milton, his longtime home, after the FBI and IRS raided in Canton law office.