Fishkill’s Bagel Tycoon in Jail

A Hudson Valley entrepreneur who made his fortune scamming would-be bagel shop owners is heading to jail.

Joseph Smith may share the same name as the founder of the Mormon Church, but prosecutors say he is anything but a saint. The former Fishkill resident was recently sentenced to three and a half years in prison and ordered to pay more than $2 million in restitution after being found guilty of fraud and tax evasion.

Smith was the owner of New York Bagel Enterprises Inc., where the Justice Department says he committed wire fraud and tax evasion as part of a scheme to scam potential business partners. From 2014 to 2016, Smith sold over 160 New York Bagel franchises to operators in Pennsylvania and other states. In February, he pleaded guilty to defrauding those franchises by misrepresenting the terms of their agreements.

The 57-year-old businessman guaranteed his business would get funding for the new stores, which he later admitted was not true. He also didn’t reveal the true costs of opening bagel stores, surprising franchisees with fees of up to $44,000 after opening.

The franchise operators asked for their money, but Smith refused. Instead, prosecutors say he deposited more than $1 million in accounts, which he used to pay for personal trips, car payments and rent. Additionally, Smith was convicted of failing to file corporate or personal income taxes for the money, failing to pay amounts owed to the IRS.

Smith was sentenced to three years and six months in prison, three years of probation, and ordered to pay $2,100,450 restitution to those he scammed. FBI Special Agent Jacqueline Maguire said Smith engaged in a “clear case of fraud” and said he was satisfied the sentence brought justice to his victims.

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