The former CEO of Axium International, Inc., which was a leading Hollywood payroll services company until its collapse in 2008, has been arrested on federal charges that he allegedly took millions of dollars of company funds and failed to report the income to the IRS.
John Visconti, 71, of Beverly Hills, was arrested on June 2 by special agents with IRS — Criminal Investigation Unit at a Los Angeles Superior Court facility where he had gone to appear on an unrelated matter. A three-count indictment against him was unsealed during a hearing on Monday afternoon in United States District Court. Visconti pleaded not guilty, and a trial is scheduled for July 29.
Axium was one of the largest payroll services companies serving the entertainment industry, at its height processing hundreds of millions of dollars in payroll for its clients. As the payroll services provider and employer of record for its clients, Axium regularly submitted payroll tax returns to the IRS and the tax authorities of several states. The filing of the tax returns regularly generated tax refunds.
Axium collapsed in 2008 after revelations that it owed tens of millions of dollars in payroll taxes, which led to Axium’s lender foreclosing on its bank accounts. A Chapter 11 bankruptcy case for Axium, filed in January 2008, remains an active case.
According to the indictment, Visconti and another Axium officer diverted millions of dollars from Axium. In some cases, Visconti and his co-conspirator allegedly pocketed tax refunds that should have gone to Axium and its subsidiaries. The indictment alleges that Visconti and his co-conspirator opened secret bank accounts in the names of Axium and its subsidiaries in which to deposit the stolen refund checks.
The indictment further alleges that, for more than two years, Visconti and his co-conspirator took weekly cash payments from Axium that averaged $8,000. Furthermore, Visconti and his co-conspirator allegedly formed a construction consulting company that billed Axium for $570,000 in services, and they concealed from Axium that they were profiting from the arrangement. Visconti arranged for about half of the net salary paid to a purported Axium employee — approximately $82,000 — to be cycled back to a bank account that he controlled.
Visconti is charged with conspiracy, tax evasion and filing a false tax return. If convicted he faces a statutory maximum sentence of 13 years in federal prison.
During the hearing on Monday, a United States magistrate judge ordered Visconti freed on a $100,000 bond, He will be subject to electronic monitoring during his pre-trial release.
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