Former reBar owner sentenced to jail for tax fraud

July 21, 2014 By Charisma L. Miller, Esq. Brooklyn Daily Eagle
reBar at 147 Front St. in DUMBO. Eagle photo by Kevin Jones
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The owner of a popular Brooklyn wedding venue was sentenced Monday to three- and one-third to 10 years behind bars for failing to pay state and city sales taxes.

Jason Stevens sat silently in the Brooklyn criminal courtroom as he waited for Brooklyn Supreme Court Justice Matthew Sciarrino to call his case and hand down the official jail sentence. Stevens, 41, plead guilty to grand larceny and criminal tax fraud in connection with stealing approximately $200,000 in sales tax that he collected between 2009 and 2012, but failed to remit to the state. In addition, Stevens also admitted to failing to collect approximately $1.2 million in sales tax during the same period.

The defendant “was not as forthright as he should have been,” Assistant D.A. Gregory Mitchell said at Monday’s sentencing. 

Failing to pay taxes was only one facet of Stevens’ legal concerns. Stevens abruptly shuttered the noted watering hole and wedding reception venue, reBar, in May, with little notice to couples or the establishment’s employees.

“Rebar is bankrupt and closed. Please dispose of your keys and do not enter the premises. Please forward to any staff not included,” is the only message that Stevens gave to employees.

With reBar’s sudden closure, engaged couples lost their initial wedding venue deposit and, in the case of weddings scheduled for the summer, their complete wedding venue payment. The cost of a Saturday wedding at reBar was $25,000 with a required 50 percent deposit in order to secure the desired wedding date. 

Stevens expressed remorse prior to sentencing, explaining to the court, “I have nothing left but to say I’m sorry.” 

The Brooklyn District Attorney’s office only dealt with the criminal tax evasion issues leaving the consumer fraud concerns to the New York state Attorney General’s office which reached out directly to reBar couples in an attempt to redress the financial nightmare brought on by Stevens’ actions. 

Attorney General Eric Schneiderman announced that his office reached a tentative agreement for Stevens to also pay restitution of approximately $1 million, to couples who paid for a wedding venue that they were ultimately denied. It is unclear if the agreement has been finalized, but a time bar will be applied for couples who have not yet filed complaints with the Attorney General’s office with proof of payments made to reBar and Stevens. 

The rashness of Stevens’ actions may attack one’s sensibilities of fairness; however, there is very little legal recourse for employees.  

“New York is an at-will employment state,” Brooklyn employment attorney Matthew Porges previously told the Brooklyn Daily Eagle. In New York, employees generally work at the will of the employer. An employee can be fired, at any time, without cause; absent any harassment or discrimination charge against the employer, the employee is simply out of a job.  “The reBar situation is difficult because the employees can be fired for any reason,” Porges confirmed. 

“What we have here is a group layoff,” stated the Coney Island attorney.  New York and federal law provides a safety net — unemployment insurance — for employees who find themselves without a job, though no fault of their own. Unemployment insurance provides weekly payments for a proscribed period of time with a goal of providing individuals with a financial means to address basic human needs while they search for new employment.

According to the New York State Department of Labor, employers pay a state contribution for each employee which funds unemployment insurance. Additionally, employers pay a per-employee federal tax, which assists the administrative costs of implementing the system. Typically, unemployment insurance is funded by the employer contributions via New York State Unemployment Insurance Trust Fund (NYSUITF) and the Federal Unemployment Tax Act ( FUTA).

Allegations have been made that reBar owner Stevens had been illegally skimming profits and may have been in arrears of his tax and other financial obligations as related to reBar. However, even if Stevens failed to make the appropriate contributions to NYSUITF and FUTA, the employees would not be penalized for the errors of their employer.

There may be recourse for employees who are owed a paycheck for hours already worked.  According to an unnamed Gothamist source, reBar was shuttered on payday.

“[It] was payday and roughly 50 employees are not getting their two-week paychecks,” the former upper management employee told the online news source. If an employee is fired or let go on a scheduled payday, New York law requires that such employee be given his remaining paycheck by the next scheduled pay period.  Employees may, if necessary, bring a claim for unpaid wages. 

It is unclear if reBar employees are seeking legal action as a group or if employees will address their employment concerns individually.

“I completely failed the trust placed in me by friends, family, Brooklyn and my employees,” Stevens said as court officers prepared to place him in handcuffs.  “I will spend my time in prison to become a better man.”

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