- Created on Tuesday, 15 July 2014 21:43
- Written by USDOJ
Raleigh, North Carolina - Thair Alwan and his son Saill Fadhil, owners and operators of Raleigh, North Carolina, area pizza stores, pleaded guilty today to willfully filing false tax returns in the U.S. Court for the Eastern District of North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court documents and statements made in court, Alwan, of Garner, North Carolina, and Fadhil, of Raleigh, own and operate a number of pizza stores in and around Raleigh called I Love NY Pizza. During the tax years 2008 and 2009, Alwan and Fadhil willfully skimmed almost all of the company’s cash receipts from their various stores and filed false federal income tax returns which failed to report the flow-through income, resulting in substantial tax underpayments. The skimmed receipts – estimated at $1.34 million – were used for personal expenditures or deposited into their personal bank accounts. When making cash deposits, the defendants structured the transactions under $10,000 and avoided the filing of Currency Transaction Reports.
According to court documents and statements made in court, I Love NY Pizza had two stores locations in Raleigh and one store location in Knightdale by 2008, and in 2009 another location in Apex was added. Fadhil eventually assumed management responsibility for a location after he graduated from college. Although employees stated that the business was at least 40 percent cash sales, cash deposits into the corporate bank account, as a percentage of total deposits, were 1.3 percent in 2008 and 2.3 percent in 2009. Between 2007 and 2010, Alwan made or caused 73 currency deposits into his personal accounts. Of the 73 deposits, 50 were at least $9,000, and the majority of these were in the amount of $9,980. None of the deposits were more than $10,000.
Alwan and Fadhil each face a statutory maximum sentence of three years in prison, one year of supervised release and a maximum fine of $250,000 per count at their sentencings, which have not yet been scheduled. Alwan and Fadhil have also agreed to pay restitution to the IRS.
The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorney Todd Ellinwood of the Justice Department's Tax Division and Assistant U.S. Attorney Adam Hulbig of the Eastern District of North Carolina.