United States Attorney's Office District of Connecticut
Press Release

WATERBURY PUBLIC OFFICIAL PLEADS GUILTY TO BRIBERY, INCOME TAX, AND FEDERAL CAMPAIGN OFFENSES

Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that THOMAS M. ARIOLA, JR. of 90 Cannon Ridge Road, Watertown, Connecticut, pleaded guilty today in federal court to bribery, federal income tax, and federal campaign offenses. ARIOLA appeared before Senior United States District Judge Alan H. Nevas in Bridgeport and admitted his guilt.

According to statements made by the Government at this afternoon’s guilty plea proceeding, ARIOLA was an employee of the City of Waterbury and at times was the City’s Budget Director and the Chief Fiscal Officer of the City’s Department of Education. ARIOLA was appointed by, and reported directly to, the former Mayor of the City of Waterbury, Philip Giordano. Also, ARIOLA was a certified public accountant who did accounting and tax preparation work for individual and corporate clients, including a Waterbury contractor who provided landscaping, snow removal, and other goods and services to residential and commercial customers, as well as to the City of Waterbury. The contractor was not identified in court.

In April 2001, the City and the contractor entered into a contract for the contractor to provide street-sweeping services to the City during the Spring and early Summer of 2001. The contractor was to sweep the approximate 306 miles of City streets for $109,395. Following the awarding of the contract, disputes arose between the City of Waterbury and the contractor concerning the failure of the contractor to timely and adequately sweep streets. On July 25, 2001, the contractor came to City Hall and met with AROILA about the disputes over the street-sweeping contract. ARIOLA had no involvement in this area of City business. The contractor gave to ARIOLA two checks in the amount of $250 payable to a City of Waterbury public official’s unsuccessful U.S. Senate campaign. The checks were drawn on bank accounts held in the names of two of the contractor’s principals. ARIOLA took the checks.

According to a wiretap intercept at the time, the checks were given to influence and reward an unidentified public official in connection with giving preferential treatment to the contractor in connection with disputes related to the 2001 street-sweeping contract.

With respect to the tax offense, ARIOLA was the accountant and tax return preparer for the Waterbury contractor. From 1997 through July 2001, ARIOLA conspired with the Waterbury contractor and its principals to defraud the United States and impede the Internal Revenue Service in computing and collecting revenue from the contractor. ARIOLA had provided accounting services for the contractor and its principals in exchange for the contractor and its principals providing airline tickets to ARIOLA and others associated with ARIOLA. The contractor had received those and other airline tickets in a bartering arrangement with clients involved in the travel business in exchange for providing landscaping services to the clients. When preparing the corporate and personal tax returns for tax years 1997, 1998, and 1999 for the contractor and its principals, they failed to include on the returns income that the contractor and its principals had received by way of their bartering arrangement with the contractor’s clients. The corporate and personal tax returns unreported income totaled approximately $71,434 in 1997, 1998, and 1999.

In addition, ARIOLA failed to report on his personal tax returns approximately $44,660 in income that he received from the contractor in airline tickets and from his accounting and tax preparation business. ARIOLA often performed the private accounting services using City employees and while in his City office.

On July 26, 2001, FBI and IRS special agents executed a federal search warrant at the Chase Building in Waterbury, seizing from ARIOLA’s office financial records of ARIOLA’s clients. As part of the plea agreement, ARIOLA has agreed to pay the IRS $16,520 in unpaid personal federal taxes, plus penalties and interest for 1997, 1998, and 1999.

As for the campaign finance offense, in 2000 and 2001, ARIOLA was the Deputy Treasurer and/or the Treasurer of the Political Committee for the Waterbury public official who unsuccessfully sought election to the U.S. Senate in November 2000. The Political Committee was established under the Federal Election Campaign Act (FECA) and was obligated to report to the FECA concerning its fund raising and other activities.

On July 3, 2001, the FEC sent a letter to ARIOLA as the Political Committee’s treasurer, raising questions about several contributions the Political Committee received, including a $1,000 contribution from a corporation in Massapequa, New York, and two $1,000 contributions purportedly by the same person. Contributions from a corporation and contributions exceeding the $1,000 limit under the FECA are illegal.

On July 10, 2001, ARIOLA and the public official spoke on the telephone and devised a plan so that the Political Committee could avoid having to refund the illegal $1,000 corporate contribution and the illegal second $1,000 contribution. This plan involved ARIOLA’s supplying the FEC with false information concerning the sources of these illegal contributions. On July 17, 2001, ARIOLA sent to the United States Senate a letter that contained false information concerning the sources of the illegal $1,000 contribution made by the corporation and the illegal second $1,000 contribution made by the same donor.

ARIOLA faces a maximum term of imprisonment of 16 years and a fine of up to $600,000 fine. Judge Nevas did not set a sentencing date and released ARIOLA on bond.

This ongoing investigation is being conducted by the Federal Bureau of Investigation and Internal Revenue Service - Criminal Investigation. The case is being prosecuted by Assistant United States Attorneys Jonathan Biran and Peter S. Jongbloed.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov