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State v. Barasch

October 15, 2004


On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Indictment No. 02-03-0437.

Before Judges Kestin,*fn1 Lefelt and Alley.

The opinion of the court was delivered by: Lefelt, J.A.D.


Argued September 14, 2004

A jury acquitted defendant Larry Barasch of theft, but convicted him of second-degree failure to remit collected State sales taxes in an amount of $75,000 or more, N.J.S.A. 54:52-15. Judge Cleary sentenced defendant to five years imprisonment with restitution of $187,742.46. Defendant appeals, advancing the following five arguments: (1) that Judge Cleary erred when, without any invitation, she interrupted jury deliberations; (2) that the judge erroneously instructed the jury on the elements of N.J.S.A. 54:52-15, by failing to advise the jury that defendant must not only purposely fail to remit the collected Sales taxes but must also intend to evade or avoid taX responsibility; (3) that the trial judge erred by not limiting the victim's testimony to the theft charge; (4) that trial counsel was ineffective; and (5) that the trial judge erred by imposing an excessive sentence.*fn2 We reject arguments (3), (4), and (5) as having insufficient merit to warrant further discussion, R. 2:11-3(e)(2), and explain in this decision why we reject defendant's first two arguments and affirm.


Beginning in 1994, defendant Larry Barasch opened Great Feeling Spas, Inc. as a new business. Originally, defendant intended to retail and install Cal Spa spas by capitalizing on his previous experience constructing decks and installing spas. By 1996, however, defendant had ceased constructing decks as Great Feeling Spas was expanding rapidly, with sales increasing from ten to thirty percent each year. As the business grew, Great Feeling Spas became involved with additional suppliers besides Cal Spa and also began retailing gazebos, pool tables, and other luxury home entertainment.

From the outset, Great Feeling Spas experienced taxation problems. By September 29, 1998, the business had incurred a $235,039.33 sales and use liability. This liability expanded by almost $40,000 as the State, in September 1998 and February 1999, noticed the deficiency and demanded payments within ninety days. By July 1999, the State had obtained a judgment against Great Feeling Spas and defendant personally.

In November 1999, defendant entered into an installment payment plan with the State. Defendant agreed to pay $628,226 in one down payment of $50,000 and thirty-six payments of $20,493 beginning December 1999. Defendant, at this time, also promised to pay all future taxes in a timely fashion.

Unfortunately, in October 2000, defendant developed two hernias and underwent surgery in January 2001. Because of the surgery, defendant was unable to return to work until March. During defendant's absence from the business, his wife Ann, who had been the bookkeeper, expanded her functions in an effort to cover defendant's absence.

Great Feeling Spas again fell into tax problems. It filed an untimely return for the fourth quarter of 2000, resulting in the addition of interest and penalties to defendant's twenty-first or twenty-second*fn3 installment payment made under defendant's 1999 payment plan. The agreed December 2000 monthly payment was not made until January 27, 2001, but when made also included January's monthly payment.

For the first, second and third quarters of 2001, Great Feeling Spas's tax returns were late and deficient in amount. Consequently, the State voided the 1999 payment plan, although defendant was permitted to continue making payments to reduce liability. Defendant failed to pay the January, March, and April 2001 installments, but paid these arrears by May. Delinquency on his regular filings also triggered a notice and demand for payment in July 2001 and a final warning visit from a Division of Taxation field investigator and his supervisor in August 2001.

A new payment schedule for $222,229 which was then owed by defendant was developed, but the State would only acquiesce to the plan if defendant paid $81,595 for the third quarter of 2001, by November 20, 2001. The amount requested by the State constituted the sales taxes defendant had just collected from the third quarter. Defendant failed to pay by November 20 and instead, on November 21, filed a Chapter 11 bankruptcy petition.

Defendant was arrested in December 2001 and indicted in March 2002. The indictment charged defendant with second-degree theft by failure to make the required disposition of over $75,000 collected from customers, N.J.S.A. 2C:20-9, and second-degree failure to remit taxes collected or withheld, N.J.S.A. 54:52-15. ...

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