John Visconti, former chief executive of Axium International Inc., was convicted on Tuesday of tax evasion, conspiracy to defraud the Internal Revenue Service, and filing a false tax return.
The conviction marks the end of the downfall of Hollywood’s Axium International, one of the largest payroll services companies serving the entertainment industry which at one point had more than $1 billion in gross revenue per year, according the Department of Justice. The company imploded into bankruptcy in 2008 after running up tax delinquencies of more than $100 million and suffering a foreclosure on one of its bank accounts.
Visconti and Axium’s former chief operating officer, Ronald Garber, used a variety of methods to divert approximately $5.1 million to themselves from Axium between 2005 and 2007. Visconti took an additional $1.9 million in corporate loans that he did not repay. Visconti reported none of the funds pocketed by him on his federal income tax returns.
“This defendant and his co-conspirator stole millions from Axium over the course of many years and failed to pay taxes on those amounts,” said U.S. Attorney Eileen Decker, in a statement. “His conduct victimized not only the employees of Axium who lost their livelihoods when the business collapsed, but all American taxpayers who are paying their fair share.”
Visconti has not yet been sentenced, but faces a maximum sentence of 13 years of imprisonment and a maximum fine of $750,000. Axium’s tax delinquencies also resulted in the IRS assessing a recovery penalty against Visconti of $15 million.
The firm was sold out of bankruptcy in 2008 for $7.1 million to Entertainment Partners of Burbank. About 500 Axium employees lost their jobs as a result of the company’s collapse.
Technology reporter Garrett Reim can be reached at firstname.lastname@example.org. Follow him on Twitter @garrettreim for the latest in L.A. tech news.