FOR IMMEDIATE RELEASE                                         TAX
THURSDAY, MARCH 7, 1996                            (202) 514-2008
                                               TDD (202) 514-1888

     FUGITIVE CONVICTED IN MULTI-MILLION DOLLAR FRAUD SCHEME 

    WASHINGTON, D.C. -- Gideon Misulovin, a New York businessman
doing business in New Jersey, who disappeared the day a federal
jury began deliberating his tax evasion trial, was convicted
today of scheming to defraud the United States of more than $6.5
million in excise taxes, the Department of Justice announced.  
    Misulovin, who was free on $500,000 bail, attended each day
of the trial until he failed to appear Monday, March 4, for
closing arguments.  Judge Dickinson R. Debevoise of U.S. District
Court in Newark issued a warrant for his arrest.
    The jury convicted Misulovin of conspiracy to impede and
impair the Internal Revenue Service (IRS) in the ascertainment
and collection of federal motor fuel excise taxes, wire fraud and
money laundering stemming from a scheme to prevent state and
federal tax authorities from determining what had happened to
unpaid diesel excise taxes.  
    Misulovin and his co-conspirators sold untaxed diesel fuel
in a series of paper transactions through real and bogus
wholesale companies.  One of the nonexistent companies, called a
"burn" or "butterfly" company, assumed the tax liability imposed
by the U.S. and New Jersey, then disappeared, allowing the
conspirators to keep the excise taxes they collected from
truckstops and service stations.  
    The case, part of a nationwide motor fuel excise tax
enforcement effort, was investigated jointly by the Motor Fuel
Task Force and the New Jersey U.S. Attorney's Office.  In an
effort to infiltrate the bootleg gasoline industry, task force
agents set up an undercover business called RLJ Management that
competed directly with the defendants' bootleg operation.  
    Federal agents seized Misulovin's assets including
approximately $70,000 in cash from his residence, and $277,000
from his business bank account in November of 1992, at the
conclusion of the undercover operation.  
    Misulovin's co-defendant and co-conspirator, Arnold
Zeidenfeld of Brooklyn, pled guilty prior to trial and testified
for the government.  Gurmit Singh and Manbir Singh of Matawan,
New Jersey, who operated truckstops in southern New Jersey also
pleaded guilty for their roles in the scheme.
    The conspiracy count, and each wire fraud count, carries a
penalty of up to five years in prison and a $250,000 fine.  Each
money laundering count carries a penalty of up to 10 years in
prison and a $250,000 fine.   
    The task force includes attorneys from the Department's Tax
Division, and agents from the IRS Criminal Investigation and
Examination Divisions, the Federal Bureau of Investigation, the
U.S. Department of Transportation and the New Jersey State
Department of Taxation and Finance.  
    Trial Attorneys Seth D. Uram and Charles A. O'Reilly of the
Department's Tax Division, prosecuted the case.
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96-098