Los Angeles, California – LAWFUEL – IRS News – Two men who operated an automobile repair shop at the Peninsula Arco Station in Rancho Palos Verdes plead guilty in related cases to tax fraud charges stemming from a scheme in which they failed to report over a quarter million dollars in income to the Internal Revenue Service.
In separate criminal informations filed in United States District Court in Los Angeles, Alireza Ashraf and Hossein Afshar were each charged with two counts of subscribing to false tax returns that they had filed with the Internal Revenue Service for the years 1999 and 2000. This morning, Ashraf formally entered his guilty plea before United States District Judge Audrey B. Collins. Previously, on January 25, 2007, Afshar pleaded guilty to the information filed detailing his criminal activity.
Ashraf and Afshar operated the automobile repair shop at the Peninsula Arco Station from August 1998 through November 2002. For the years 1999, 2000, and 2001, both Ashraf and Afshar would direct customers to pay for repair services by writing a check to Ashraf. To further conceal the diverted proceeds, Ashraf made a stamp that read “Arco (Ali-Ashraf)” that was used to endorse customer’s checks. The diverted checks were then deposited into Ashraf’s personal bank account at Bank of America. During the same time period, Afshar diverted some of the business’ customer’s checks, as well as additional money that was Afshar’s share of the repair shop’s income, into his personal account at Bank of America.
In 2003, Ashraf opened and operated another auto repair shop, Benz ‘N Beamers, in Lomita, California. During this time, Ashraf continued to divert customer’s payments for auto repair services to his personal bank account at Bank of America and to business accounts he maintained at Hanmi Bank and at California Bank and Trust.
Neither Ashraf nor Afshar told their respective income tax return preparers about the money they had diverted from the auto repair shop operations. Accordingly, the income that they both had concealed was never reported to the IRS. As a result of their intentional and willful failure to report their true and accurate taxable income, Ashraf’s and Afshar’s actions resulted in a tax loss to the IRS in excess of $100,000.
In their plea agreements, Ashraf and Afshar agree to file amended tax returns with the IRS for the years in question, correctly reporting their income they had diverted from the operation of their auto repair businesses and paying the resulting tax.
Both Ashraf and Afshar face a maximum possible term of six years imprisonment and fines totaling $500,000 each. Sentencing for Afshar is scheduled for June 18, 2007 before Judge Collins. Ashraf is scheduled for sentencing on May 7, 2007.
This case is the result of an investigation conducted by agents of the Internal Revenue Service’s Criminal Investigation Division in Los Angeles.List your legal jobs on the LawFuel Network