CAMDEN, N.J. Dominick Paglione, former president and CEO of Lion Trailways of New Jersey and Pennsylvania, has escaped a jail sentence for falsifying payroll tax records for five years.

Paglione was able to avoid incarceration because he's on a kidney transplant list, said a spokesman for the U.S. Attorneys Office.

Paglione pleaded guilty in October to underreporting employee wages subject to federal employment tax for Lions Corp., which at the time was the parent company of Lion Trailways.

He owes the government about $1.7 million in back taxes, penalties and interest, said Greg Reinert, a spokesman for the U.S. Attorneys Office in New Jersey.

For his sentencing, Paglione appeared in federal court in Camden before U.S. District Judge Joseph E. Irenas, who ordered he receive eight months of community confinement, which is similar to a halfway house, and 12 months home confinement.

Paglione gave $150,000 to the government as part repayment, an IRS spokesman said.

Prosecutors say Paglione's health was a factor in the sentencing, particularly because he is ill, needs a new kidney and is on an organ donor list. He could have been sentenced to as many as three years in prison.

Late last year, Paglione pleaded guilty to one count charging him with filing a false employer's tax return for 2003. (See Nov. 15 Bus & Motorcoach News.)

He underreported the total employee wages subject to federal employment tax, resulting in more than $400,000 in underpayment of taxes. Authorities said he falsified more than a dozen quarterly tax returns for the company over a five-year period.

Ownership of Lion Trailways reportedly has changed and the company, which for a time lost its Trailways affiliation, has been readmitted as a Trailways member.

The company has facilities in Rio Grande, N.J., and Levittown, Pa.