Minneapolis Restaurant Owner Charged with Tax Fraud

Published On: 14th November 2014

From the internet

The owner of a now closed Minneapolis restaurant has been charged with 68 felony counts of filing false and fraudulent tax returns and failing to pay sales tax.

According to the Hennepin County Attorney’s Office, the restaurant owner underreported sales by over $1 million and underpaid by $100,000.

The restaurant was closed this past summer.

The complaint states that the man filed fraudulent tax returns over a two year period. He was audited by the IRS prior to 2009 for failing to correctly file his tax returns and pay the right amount of tax.

Many times when a person is having a cash-flow problem, the IRS agents are able to work out a repayment program that works for all parties involved. In such cases, the individual is not charged for failing to pay their tax. However, it is said that the restaurant was not having financial difficulties at the time the alleged fraud occurred.

The former restaurant owner said he was not aware that charges were being filed against him. When contacted by one local media source, the man said he had not heard anything about the charges before the reporter asked him about them on the phone.

The reporter stated that the charges came after the Minnesota Department of Revenue conducted an investigation and found that the man had allegedly knowingly took money from customers who thought their sales tax would be going to the state government and used that money for his business.

It is not uncommon for there to be a failure to report in the restaurant and alcohol business, but many times the business owners may find themselves in a financial situation. This particular former restaurant owner has no prior criminal record and has not been arrested for the alleged crimes. He isn’t believed to be a flight risk.

At the time the restaurant closed in 2009, the restaurant made an announcement that it would be closing its doors and thanked its customers for 9 years of supporting the restaurant. However, the restaurant had previously announced that it would go dark in July. At the time, they said in a short Facebook statement that the landlord had terminated the lease.

Each count of tax fraud is punishable by up to a $10,000 fine and five years in prison.

In another tax fraud case that shorted the IRS $1.7 million, a man was sentenced to 6 years in prison. This particular Minneapolis resident filed false tax returns for fictitious people and illegal immigrants. He then redirected the money to Mexico where it was used to raise cattle and grow oranges.

Three other individuals were convicted for this scheme and they are serving short prison terms for the roles that they played.

Purchases with the money included property in Mexico, including an orange grove, vehicles that were purchased in the U.S., and 40 head of cattle.

Prosecutors had actually put the losses at around $2.5 million.

 

http://minnesota.cbslocal.com/2014/10/15/owner-of-shuttered-mpls-restaurant-charged-with-tax-fraud/

http://www.mprnews.org/story/2014/10/15/tax-fraud

http://www.bizjournals.com/twincities/news/2014/10/15/michael-whitelaw-social-house-tax-charges.html?page=all

http://www.startribune.com/local/west/278702541.html