New Hampshire in the tax news again

[Demosthenes]

Former rep faces new tax charges
Palumbo was majority leader in New Hampshire House

By SARAH LIEBOWITZ
Monitor staff
April 19. 2007 8:00AM

Former House majority leader Vincent Palumbo is facing criminal charges of failing to file five years' worth of federal income tax returns. The charges come 16 years after Palumbo pleaded guilty to bank fraud and income tax violations and was sentenced to more than a year in prison.

Palumbo, a Republican, ascended to the top ranks of the House leadership at a young age, and at one point, he planned to run for the position of House speaker. But in 1989, when Palumbo was 33, he resigned from the House amid reports that he misrepresented his educational history and his record as a businessman. Soon after, he faced criminal charges.

"I guess I'm kind of speechless because I hoped he'd do better," Doug Scamman, who served as House speaker when Palumbo was majority leader, said yesterday. As a politician, Palumbo was "ambitious" and "very intelligent," said Scamman, who added that he hasn't seen Palumbo in years.

Palumbo, of Kingston, was arraigned yesterday at U.S. District Court, according to a statement from the U.S. attorney's office in Concord. He faces five criminal charges of "willfully" failing to file federal income tax returns; each charge carries a maximum penalty of one year in prison and a $250,000 fine, Assistant U.S. Attorney Bill Morse said. A trial is scheduled to begin June 19.

According to court records, Palumbo, who is now 50, failed to file federal returns for tax years 2000 through 2004. During that time, Palumbo's annual income ranged from $132,150 to $734,406, money he earned as a mortgage loan officer, federal prosecutors said. Investigators from the Portsmouth office of the Internal Revenue Service's criminal division handled the case.

Palumbo's attorneys didn't return calls for comment yesterday.
As a Republican lawmaker, Palumbo's political ambitions were lofty. He planned to seek the speaker's position when Scamman left office and told the Lawrence Eagle-Tribune that he aspired to be a U.S. senator. In the Eagle-Tribune article, Palumbo was described as a successful businessman who drove a Cadillac and played golf four times a week, in addition to his political work.

But in 1989, the Monitor reported that four banks took legal action against Palumbo after he failed to repay more than $47,000 in loans. Three of the banks placed attachments on Palumbo's Kingston home, as security for the debts. Reporters began poring over Palumbo's business and education record and found that he had misrepresented his background.

The misrepresentations included Palumbo's education accomplishments. He said that he had a master's degree in electrical engineering from Columbia University, a fact the school denied. Palumbo graduated with a Bachelor of Arts, but he never earned a master's degree, news reports said.

Palumbo also said that he created and owned a video company in Salem, a fact that Frank Jordan, the company's president disputed. Rather, Jordan said, Palumbo had purchased 10 percent of the company's stock, according to news reports from the time. In addition, Palumbo said he was a partner in the Massachusetts company R&J Packing, a fact that former officials denied. And the founder of a Salem electronics firm disputed Palumbo's claim that he served as that company's director, according to news reports.

When a Monitor reporter asked Palumbo how he earned a living, Palumbo replied, "I'm involved in small businesses," according to news reports. Palumbo added that he was involved in "half a dozen" businesses that generated less than $10,000.

He was living off previous earnings, Palumbo said.

Soon after those reports, Palumbo resigned. He later pleaded guilty to 10 counts of bank fraud and failure to file income tax returns. Palumbo had lied about his income, assets and employment, and he had secured $225,000 in loans from New Hampshire banks on false pretenses, prosecutors said at the time, according to the Associated Press. He was sentenced to 15 months in prison.

Since pleading guilty in 1991, Palumbo may have faced more financial trouble. The Rockingham County Registry of Deeds has documents that list a Vincent Palumbo in Kingston facing a tax lien from the federal government in 2000. Also according to that list, the town of Kingston placed several liens on the property of a Vincent Palumbo, in order to secure debt. There is only one Vincent Palumbo listed in Kingston. He subsequently paid off those debts.