Financial Fraud: Jeffrey Nowak and Ramzi Suliman Conspiracy to Defraud In Filing False Corporate Tax Returns and Tax Evasion
Former Nevada Liquor Store Owner Convicted of Conspiracy to Defraud the United States, Assisting in Filing False Corporate Returns and Tax Evasion
Skimmed Cash and Gave Preparer False Set of Books to Evade Reporting Nearly $4 Million in Sales
A federal jury sitting in the District of Nevada found the former co-owner of three Las Vegas, Nevada, liquor stores guilty of conspiracy to defraud the United States, assisting in filing false corporate tax returns and tax evasion, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.
According to the evidence at trial, Jeffrey Nowak and his co-defendant, Ramzi Suliman, jointly owned and operated liquor stores in Las Vegas. At their first liquor store, Super Liquor Store South Strip, Nowak and Suliman conspired to skim cash receipts and maintain a double set of books in order to underreport income to their accountant and tax return preparer. One set of books was an accurate accounting of sales, while the second set of books fraudulently omitted nearly $4 million in cash receipts skimmed from the business. Nowak and Suliman provided the fraudulent books to their accountant-return preparer, 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. 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 near $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 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. As Mr. Nowak learned today, if they refuse to do so, the Department of Justice and the IRS will work to see that they are identified and held accountable.”
“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 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.”
A sentencing date has been scheduled for Nov. 17. Nowak faces a statutory maximum sentence of five years in prison on the charge of conspiracy to defraud the United States, 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 and is awaiting sentencing.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Bogden commended special agents of IRS-CI, who investigated the case and Assistant U.S. Attorney Kathryn C. Newman for the District of Nevada and Trial Attorney Eric C. Schmale of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
