Tax Fraud: Paul and Freida Bouraxis Sentenced For Federal Tax Offenses

Financial Fraud,Tax Fraud
Tax Fraud Paul and Freida Bouraxis Sentenced For Federal Tax Offenses

Franklin Family Sentenced in Tax Conspiracy

United States Attorney Gregory J. Haanstad announced that Paul Bouraxis (age 67), his wife, Freida Bouraxis (age 61), son, Andreas Bouraxis (age 40), and son-in-law, Reiad “Ray” Awadallah (age 45), were sentenced in federal court today for federal tax offenses.

Previously, Paul, Freida, and Andreas Bouraxis pleaded guilty to conspiring to defraud the Internal Revenue Service, by skimming cash from various restaurants they operated in the Milwaukee area, failing to report substantial income on their personal income tax returns, paying employees under the table in cash, and failing to pay federal payroll taxes on those cash wages.  As part of this scheme the defendants skimmed more than $3 million form their businesses and underreported and underpaid federal income and payroll taxes by approximately $1.4 million.  Paul Bouraxis also pleaded guilty to one count of tax evasion. Awadallah pleaded guilty to one count of filing a false federal return based on his failure to report cash he was paid under the table as a general manager of one of the Bouraxis’ restaurants.

Paul Bouraxis was sentenced to two years in federal prison. Andreas Bouraxis was sentenced to 1 year and one day in prison. Freida Bouraxis and Awadallah were each sentenced to three years of probation, during which they will spend 6 months in home confinement.

Paul, Freida, and Andreas Bouraxis were also ordered to pay $1.4 million in restitution, which will be collected from funds the IRS seized from the defendants’ businesses and safe deposit boxes. The defendants agreed to forfeit an additional $442,000 of the seized funds to the United States to settle a related civil forfeiture action.

Federal agents also seized gold and silver coins and bars, as well as jewelry, from the defendants’ business and Paul and Freida’s residence.  Virtually all of these items will be sold and the proceeds paid to the IRS to cover penalties and interest on the taxes the defendants attempted to evade. Finally, Paul Bouraxis will assist in transferring funds held in a bank account in Greece to the IRS. Separately, Awadallah paid approximately $40,000 to the IRS for the taxes he underpaid, as well as penalties and interest.

“Those who willfully cheat the tax system unfairly shift the tax burden to honest American taxpayers who pay their fair share,” said Shea Jones, Special Agent in Charge of IRS Criminal Investigation’s St. Paul Field Office. “IRS Criminal Investigation is committed to ensuring that those who to engage in illegal schemes to evade their income and payroll tax obligations are held accountable.”

The case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Matthew Jacobs.

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