BROOKLYN, NY (November 8, 2025) — A federal appeals court has upheld a $2.68 million judgment against Philip Colasuonno of New Rochelle, the former part-owner of American Armored Car Ltd., for willfully dodging payroll taxes over four years through a cash-pay scheme involving another company.
The U.S. Court of Appeals for the Second Circuit on July 14, 2025, affirmed U.S. Magistrate Judge Judith C. McCarthy’s March 21, 2024, summary judgment ruling that ordered Colasuonno to pay the IRS $2,688,333.60 in trust fund recovery penalties plus interest for tax periods from June 2001 through December 2005.
Court records show Colasuonno, who owned one-third of American Armored, admitted he “knew and allowed false 941 returns to be filed” and knew checks were written to FJC Security Services Inc. so employees could be paid in cash to avoid federal income, Social Security, Medicare and unemployment taxes.
Colasuonno pleaded guilty in 2007 to conspiracy to commit tax fraud and aiding in the preparation of a false tax return. He was sentenced to time served plus five years’ probation and supervised release, and ordered to pay $781,467 in restitution. In 2011, he served four months in prison for violating probation by failing to make good-faith restitution payments.
The IRS first proposed a $1,768,196.20 penalty against Colasuonno on May 17, 2010.
After initially relieving him of the assessment on Oct. 19, 2010, the agency reversed course on April 21, 2011, assessing $1,742,410.30 after determining the statute of limitations had not expired.
The United States filed suit Dec. 20, 2021, to reduce the assessment to judgment.
Colasuonno argued the complaint was untimely because the IRS filed a Notice of Federal Tax Lien during his 2009 Chapter 7 bankruptcy. The Second Circuit ruled the filing, even if it violated the automatic stay, did not suspend tolling under 26 U.S.C. § 6503(h)(2), which extends the 10-year collection period by the length of the bankruptcy stay plus six months.
Colasuonno claimed the assessment amount was incorrect and that his brother Dominick, a co-owner who also pleaded guilty, may have paid part of it. The courts found he provided no evidence to overcome the presumption that IRS calculations are correct.
The court admonished Colasuonno, noting he did not argue that his plea agreement forecloses the IRS from assessing the penalty at issue in this case regardless of the statute of limitations on the criminal restitution ordered, that the law permits the IRS to maintain this action.
…Defendant’s contention, if accepted, would lead to perverse results—such as incentivizing defendants under criminal indictment for tax-related offenses to withhold making payments to the IRS, knowing they can avoid the debt and any associated penalties altogether once the clock on their restitution order expires. The Court will not countenance such gamesmanship.
Colasuonno immediately appealed the District Courts’ decision
The mandate issuing the Second Circuit’s decision was filed July 14, 2025.
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
RELATED
Series: Nightmare on the Isle of Sans Souci
Nightmare on the Isle of Sans Souci: Part IV — Who is Phil Colasuonno? (8/1/2021)
Nightmare on the Isle of San Souci: Part VI — Phil Colasuonno Sued by Feds for $2.5 mm in Criminal Tax Case (12/20/2021)
Westfair: IRS tries to collect $2.5M Colasuonno tax fraud debt (2/20/2022)
Opinion and Order of Judith C. McCarthy, dated January 27, 2023 (1/27/2023)
Justia: United States of America v. Colasuonno (12/20/2021)
Colasuonno District Court Order (3/21/2024)
Colasuonno Appeals Court Mandate (7/14/2025)
This article was drafted with the aid of Grok, an AI tool by xAI, under the direction and editing of Robert Cox to ensure accuracy and adherence to journalistic standards.
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