A Tailor Admits Underpaying on His Taxes by the Millions

Whether cutting suits or paying taxes, Mohanbhai Ramchandani, of Mohan’s Custom Tailors, displayed a knack for making all sorts of figures fit.

Mohanbhai Ramchandani

His finely woven works hung just as beautifully on towering basketball stars, among them Patrick Ewing and Wilt Chamberlain, as on Knickerbockers better known for political prowess, like former Mayors Rudolph W. Giuliani and Edward I. Koch.

But in paying his taxes, Mr. Ramchandani apparently preferred a more severe cut. Over a decade, his revered little studio near Grand Central Terminal brought in $28 million â€" but reported only $5.6 million on tax returns.

On Tuesday, Mr. Ramchandani appeared in State Supreme Court in Manhattan wearing a dark blue three-piece suit (two buttons, natural shoulders). He admitted to collecting $1.7 million in taxes from customers that he did not pay and to underpaying his personal income taxes by $256,000.

In his first court appearance, he pleaded guilty to tax evasion charges, and agreed to serve a prison sentence of one to three years and to pay $5.5 million in back taxes and penalties within two years. “As an immigrant to the United States, I have worked hard all my life to build a good business, support my family and contribute to the community,” Mr. Ramchandani said in a statement. “I made several mistakes with regard to the payment of taxes and I take full responsibility for my actions.”

Mr. Ramchandani, 66, enjoyed renown as the tailor to New York’s premier athletes. In a 1993 profile in The New York Times, he recalled coming here from India in 1972 and toiling in relative obscurity, offering conservative suits for bankers and accountants.

In 1984, Mr. Ewing’s mother called wanting a custom suit for her son, then a star at Georgetown University in Washington. Mr. Ramchandani took a discount bus to the college and measured Mr. Ewing in his dorm room.

When Mr. Ewing joined the New York Knicks, Mr. Ramchandani asked him to appear in newspaper advertisements for his store. Soon, dozens of professional athletes flocked to his suite on the 14th floor of 60 East 42nd Street.

Eventually, the most flamboyant-dressing jock of his time showed up: Walt Frazier, the former Knicks star nicknamed Clyde. “I used to see Mike advertising Ewing and Mark Jackson,” Mr. Frazier told The Times 20 years ago. “So I went over there a couple of years ago, and I said: ‘Hey, man, I’m the dress guy. What are you doing with these guys I’m the Clyde.’ ”

Mr. Ramchandani’s legal troubles began when a former employee, Vijay Tharwani, filed a whistle-blower lawsuit against him, which led to charges being filed by the state attorney general’s office. Under the terms of the plea and settlement agreement, Mr. Tharwani will receive $1.1 million from the money Mr. Ramchandani is to repay.

Investigators poring through his tax records noticed an odd (or, rather, even) trend: the digits of the store’s reported sales figures always added up to multiples of 10. So for one quarter, Mr. Ramchandani claimed to owe sales taxes of $13,484, the individual digits of which add up to 20.

The man with the measuring tape around his neck, it turns out, believes in numerology.

“There are no excuses for tax cheats, regardless of how prominent they are,” said Eric T. Schneiderman, the New York attorney general. Mr. Ramchandani’s lawyer, James O. Druker, said his client admitted his guilt as soon as authorities called with questions about his taxes. He also expects his client will plead guilty to federal charges, not yet formally filed, this summer.

Justice Larry Stephen released Mr. Ramchandani, who lives in Queens, without bail until his formal sentencing in the state case, scheduled for September.

Mr. Druker said the business should survive Mr. Ramchandani’s time in prison garb. “He’s got a healthy business,” the lawyer said. “There’s no reason why it shouldn’t continue.”

Edna Ishayik contributed reporting.

A version of this article appeared in print on March 6, 2013, on page A18 of the New York edition with the headline: A Tailor Admits Underpaying On His Taxes By the Millions.