The former co-owner of three Las Vegas liquor stores was found guilty by a jury of conspiracy to defraud the United States government and assisting in the filing of false corporate tax returns and tax evasion.
Evidence was presented at trial in a Nevada federal district court that Jeffrey Nowak and Ramzi Suliman were the joint owners and operators of the stores. At one store they owned, Super Liquor Store South Strip, they skimmed cash receipts and maintained a double books to underreport income to their accountant and tax return preparer.
One set of books was an accurate accounting, while the second set omitted nearly $4 million in cash receipts skimmed from the business. The fraudulent books causing the return preparer to create false corporate tax returns that underreported gross receipts and taxable income. Nowak and Suliman also had their individual income tax returns prepared to falsely underreport their income and tax owed. According to a statement from the US Department of Justice, for tax years 2006 to 2009, Nowak reported a total income tax owed of only $313, when in fact Nowak owed more than $400,000. The total tax loss from the conspiracy is nearly $1 million.
“Cash sales are not an opportunity for business owners to shortchange the government or produce multiple sets of books,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo. “Owners are subject to the same legal obligations that their W-2 employees comply with every pay period – they must accurately report their income to the IRS and pay their fair share of taxes.”
“When business owners willfully skim cash and cause their true income to be underreported to the IRS, they are stealing from the U.S. Treasury,” said U.S. Attorney Daniel G. Bogden. “The IRS and our office take these cases seriously, and we will continue to seek judgments, injunctions, and criminal convictions that often carry substantial prison sentences, restitution, and financial penalties.”
“The license to run a business is not a license to avoid paying taxes,” said Special Agent in Charge Tara Sullivan for the Internal Revenue Service’s Criminal Investigations (IRS-CI). “Mr. Nowak’s misconduct, skimming nearly $4 million from his business and filing false tax returns, cheated all Americans, since we all pay our fair share for the government services and protections that we enjoy.”
The pair faces sentencing later this year. They may face five years on each charge of tax evasion and three years on each charge of assisting in the preparation and filing of false tax returns. He also faces supervised release and substantial monetary penalties. Suliman pleaded guilty in July 2014 to conspiring to defraud the United States.
The logic used by U.S. Attorney Bogden reflect similar logic used by Democrats and progressives who assert that companies that do not pay their workers a “living wage” are effectively defrauding the federal government. Americans for Tax Fairness, a coalition of 400 progressive groups, issued a report in 2014 to the effect that Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing. The group used data from the Democrat staff of the House committee on Education and the Workforce. “The study estimated the cost to Wisconsin’s taxpayers of Walmart’s low wages and benefits, which often force workers to rely on various public assistance programs,” said the report.
“It found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers.”
Economists at the American Enterprise Institute and elsewhere disagree with the inherent logic revealed in demands for "decent" and "living wages" by progressives and the White House. Progressives assert the government is a part owner of businesses and the failure to adopt a policy of higher minimum wage is considered theft through unapproved subsidies.