Where do you hide $870,000 in cash from the IRS?
Shelton developer James Botti hid $870,000 in the exterior soffits of his father’s home in 2006 after IRS agents began closing in on him, according to testimony Tuesday in Botti’s federal money structuring trial in U.S. District Court in New Haven.
Andy Czaplinski, 35, a Shelton developer and long-time Botti friend, testified Tuesday that sometime in 2006 Botti told him that he hid $870,000 — bundled in 87 stacks and held together with rubber bands — in the overhanging section of his father’s roof when IRS agents questioned him if he had cash on hand.
“(Botti) was scared and nervous,” Czaplinski testified Tuesday. “He said ‘Andy, IRS agents asked if I had a lot of cash on hand. They asked if I took cruises or went to the casinos.’”
Botti, 46, was charged in November 2008 with conspiracy to structure cash transactions, structuring and two counts of giving false statement to a federal agent. He has pleaded not guilty.
The government alleges that Botti structured cash – split it into transactions of less than $10,000 to avoid detection from the IRS — and that he lied about having cash when IRS agents questioned him.
On Monday, Czaplinski, who has been granted immunity from prosecution in exchange for his testimony, testified that sometime in 2006, Botti showed him wads of $100 bills packaged in groups of $10,000 each that Botti had stored in a safe in his Bridgeport Avenue office.
Czaplinski helped Botti count the bills, that totaled $870,000.
Sometime after revealing the money to Czaplinski, Botti asked him if he could exchange to the older bills for newer ones at a casino or a bank.
“I said I would do that with him,” Czaplinski said.
Czaplinski’s testimony on Tuesday portrayed Botti as a frightened man who tried to divest of the cash after the IRS began questioning him.
According to the prosecution, on July 14, 2006, IRS agents met with Botti at his Bridgeport Avenue office to discuss his tax returns from 1999 to 2004. During the meeting, Botti told agents he kept no more than $5,000 in cash on hand.
Two days later, on July 18, 2006, Botti wrote Czaplinski a $80,000 check, paying off a loan Czaplinski lent him for a development partnership.
“(Botti) said to me, ‘It’s about time I paid you back because the IRS is investigating me,’” Czaplinski said Tuesday.
Witnesses on Tuesday included officials from Webster Bank and Sikorsky Federal Credit Union who detailed several bank deposits Botti made in 2006, each totaling $9,500.
Czaplinski testified Tuesday that on two separate occasions he made bank deposits for Botti totaling $10,000 each.
The government alleges Botti worked with his father, Peter Botti, to structure the money in several different bank accounts.
Peter Botti has pleaded guilty to one count of structuring. He is awaiting sentencing in federal court.
Botti’s attorney, William F. Dow III of New Haven, got Czaplinski to admit that he never told two federal grand juries or the IRS agents who questioned him that Botti was structuring money.
“You never mentioned anything of Jim Botti structuring money,” Dow said to Czaplinski.
Dow has said that the evidence against his client leans more toward tax crimes, such as failure to pay or failure to fail with the IRS. Botti has not been charged with tax crimes.
Botti is also charged with conspiracy to defraud the citizens of Shelton, bribery of a public official, and mail fraud.
The charges stem from allegations that Botti tried to bride Shelton Mayor Mark A. Lauretti with cash and home improvement projects to get support for his Bridgeport Avenue project.
Botti will face those charges in a separate trial.
The trial continues Wednesday.
