After being indicted last December for allegedly defrauding his own retail construction companies and contracted vendors from 2015 to 2018, former executive Jonathan Baker is facing tax charges stemming from what authorities say was a multi-million-dollar long-con of embezzlement for personal expenses.
Baker was already facing five counts of wire fraud and three counts of money laundering from a December 2019 federal indictment, alleging that he fraudulently misappropriated millions of dollars by way of embezzling funds from both his companies and three victim-lenders for a variety his personal expenses, “including, but not limited to, mortgage payments on Baker’s residence, the purchase of a BMW, and the purchase of six donkeys,” according to court documents.
Baker served as Chief Financial Officer of a retail construction company in Sparta, New Jersey, and a manager at a second. The federal indictment identifies the businesses only as Victim-Company 1 and Victim-Company 2.
Baker now faces 5 tax charges over failure to pay hundreds of thousands in federal payroll taxes, according to a Superseding Indictment filed on January 27 from the US Attorney’s Office in the District of New Jersey.
In the court document, Baker’s pattern of withholding his companies’ payroll taxes and failing to sign IRS 941 documents took place over five tax quarter endings between December 2016 and December 2017, which resulted in $493,089 in unpaid taxes.
The alleged scheme to defraud involved multiple misdirections to embezzle funds from Baker’s companies and retail clients through inducing false deals amongst the various parties and misrepresenting his construction company’s name, bank statements, balance sheets, and bank accounts through Sussex Bank.
According to business and property records, Baker, as manager and CEO, reportedly financially controlled at least five named business entities that were not directly related to the two defrauded companies: Arley Farms, LLC, 8 Quaker Road LLC, BSG New Jersey/BSG Madison Inc., J. Paul Allen Inc., and Konoba LLC. Each were allegedly involved in the laundering of defrauded funds from the victimized parties through Baker’s various entities’ bank accounts.
In 2016, then reportedly the President and CFO of Sparta-based contractor Hudson Black, Inc., Jonathan Baker ran for a seat on the Green Township Committee. In comments provided at the time, Baker said “In business, it is the role of management to engage in responsible cost control, thoughtful oversight, and open communication, and to set a direction that will ultimately preserve and grow the interests of the stakeholders. In government, the tasks are the same but the ultimate responsibility is to you, the residents. As a seasoned entrepreneur with an extensive background in finance, operations and corporate governance, I have the right skill set to ensure that our Green Township government operates effectively and efficiently to serve you.”
From April 28, 2016 to August 7, 2017, Baker reportedly made five interstate wire transfers ranging from either his construction company’s bank account to various Baker Entities’ bank accounts or lender accounts to his construction company’s account, totaling $355,761.60 according to the indictment.
When confronted by one of his lenders with evidence of fraud, Baker allegedly made repeated false statements to conceal the extent of his fraud.
In one such instance, he is alleged to have falsely claimed that one of the victimized lenders erred in filing a lien against his company and falsely affirmed that the commercial lender would be issuing a retraction and apology.
According to the U.S. Attorney’s Office for the District of New Jersey, Baker then refused to meet or join conference calls with the members of the companies to discuss the liens, refused to produce bank statements, and even went as far as to change the locks on the company’s offices and disable its telecommunications.
On June 11, 2005, Baker reportedly made a check for $19,900 from the 8 Quaker Road LLC bank account to Up and Above Contractors LLC for work on the eponymous address’ property — one of Baker’s 3 counts of alleged money laundering. Years later, in 2019, the contractors would take Baker to small claims court over failure to pay the full total of a $5,300 bill of later, separate services.
Each wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The money laundering counts each carry a maximum potential penalty of 10 years in prison and a $250,000 fine, while the tax counts each carry a maximum potential penalty of five years in prison and a $250,000 fine each. If convicted on all charges, Baker faces up to 130 years in federal prison, plus fines approaching $2 million.
In January 2020, Nationstar Mortgage filed documents with the Sussex County Clerk to foreclose on Baker’s property at 74 Hedden Rd in Green Township, over alleged unpaid principal and interest totaling $346,618.19.