A federal jury in Boston has found Covenant Oil Co. Inc. owner Augstine Pesaturo Jr. of Wakefield, Mass., guilty of evading the assessment and payment of motor vehicle fuel excise taxes owed by his business.

Pesaturo was convicted of one count of conspiracy to defraud the United States, three counts of tax evasion, and one count of filing a false U.S. Corporate Income Tax Return.
Evidence presented during the trial proved that PESATURO directed his drivers to blend untaxed kerosene and home heating oil with diesel fuel prior to selling the fuel to various trucking companies. There is a 24.4 cent per gallon federal excise tax on diesel fuel sold for use in vehicles that travel on the road. Normally, kerosene and heating oil are not similarly taxed. If, however, kerosene and heating oil are used in on-road trucks, they are subject to the same tax as diesel fuel. Pesaturo was able to purchase kerosene and home heating oil from fuel suppliers without paying the excise tax only by falsely certifying that the kerosene and home heating oil would not be sold for use in on-road vehicles unless Pesaturo paid the excise tax.
Pesaturo was also convicted of filing a false 1995 Corporate Income Tax Return for Covenant Oil that overstated the cost of the fuel that Covenant Oil sold.
Sentencing has been scheduled for Sept. 18.
Pesaturo faces a maximum sentence of five years in prison, to be followed by up to three years of supervised release, and a $250,000 fine on each of the conspiracy and tax evasion counts. Additionally, he faces a maximum sentence of three years in prison, to be followed by up to one year of supervised release, and a $250,000 fine for the false tax return count.
Special Agents of the U.S. Internal Revenue Service, Criminal Investigation, assisted by the Environmental Protection Agency’s Criminal Investigation Division investigated the case. William J. Lovett and David J. Ignall, Trial Attorneys with the U.S. Department of Justice’s Tax Division prosecuted the case.