Connection Newspapers: $1M Tax Bill May Force Sale

Known in publishing circles as “the cockroach” because his papers have escaped death so many times, Connection Newspapers CEO Peter Labovitz may have finally met his match in the form of a $1 million bill from the IRS and possible jail time.  Rumor has it that the  media conglomerate, which includes 15 weekly newspapers such as the Fairfax Connection and Alexandria Gazette Packet, will be placed up for sale to remedy its outstanding debt to the U.S government.  These rumblings follow a July 19th court appearance where Labovitz plead guilty to owing more than $940,000 in employment taxes dating back to 2007.

But this isn’t the first time Labovitz, who shacks up in a 20-room, $6 million Old Town Alexandria manse, has faced financial woes.  According to localKicks, the media executive has seen the inside of a courtroom more times than Lindsay Lohan.  Court documents show that Connection Newspapers has been in and out of bankruptcy multiple times and has been sued by its employees for back wages and by its printers for outstanding invoices.  The newsgroup also managed to escape demise during an ownership war with The Washington Times, which ultimately relieved them of millions of dollars in debt and five years of printing bills.

Labovitz faces up to one year in prison, a $100,000 fine and up to one year of supervised release for each count of conviction at his sentencing on Sept. 27, 2011.

*FishbowlDC contacted Connection Newspapers for comment but were told that the organization does not have a media contact: “We are a newspaper,” said a surprised voice on the other end of the line. “I’ve never had anyone ask for press contact so there is no one I can refer you to,” she explained.