Brooklyn Tax Preparer Pleads Guilty to Criminal Tax Fraud For Stealing Sales Tax Payments From Clients

 

The New York State Department of Taxation and Finance, along with the Brooklyn District Attorney’s Office, announced that Yehad Abdelaziz and his corporation The Five Pillars Financial Services, LTD, pleaded guilty to criminal tax fraud. A Tax Department investigation determined that between March 2015 and August 2017 Abdelaziz received money from business owners and filed sales tax returns on their behalf. However, he underreported sales or reported zero gross sales and instead pocketed the sales tax payments his clients entrusted him to remit on their behalf. “We will continue to aggressively pursue unscrupulous tax preparers who betray the trust of clients and deprive communities and the state of revenue needed for vital services,” said New York State Commissioner of Taxation and Finance Michael Schmidt. Brooklyn District Attorney Eric Gonzalez said, “Tax preparers who cheat don’t only shortchange their clients, but effectively steal from all of us. They must be held accountable and pay restitution to victims. My Office will continue to work with our partners to prosecute tax fraud and other forms of larceny schemes.” Abdelaziz and The Five Pillars Financial Services, LTD, paid more than $191,000 in restitution. The payment includes the forfeiture of more than $6,700 that was seized as part of a search warrant executed by the Tax Department. Both Abdelaziz and his corporation are also prohibited from providing tax preparation services of any kind for one year.

Specializing in COVID-19 Related Tax Problems Free consultation (in person or telephonic) with Federal Tax Practitioner, CPCU and Attorney. Our offices are conveniently located in New York City and emergency appointments are always available. Practice limited to Tax Representation and Insurance Audits.

 

 

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New York City Restaurateur Sentenced to Jail For Tax Evasion Scheme

 Torn from the Pages of the Department of Justice

A New York City restaurateur was sentenced to prison for a tax evasion scheme. Adel Kellel, 63, of New Hyde Park, New York, the owner of Raffles Bistro, formerly a restaurant located in New York City, was sentenced to 24 months in prison for tax evasion by U.S. District Court Judge Paul G. Gardephe. “All taxpayers have an obligation to honestly report their income and pay their share of taxes,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “For those who attempt to avoid these obligations and cheat the IRS, as this sentence shows, there are serious consequences.” “Adel Kellel cooked his books to conceal income from the IRS and his own accountants,” said Acting U.S. Attorney Audrey Strauss for the Southern District of New York. “He spent the ill-gotten gains on personal luxuries like a Mercedes, a Porsche, and a Maserati. Now he will spend two years in federal prison.” “The accurate reporting of income is an important responsibility of all business professionals,” said IRS-Criminal Investigation Special Agent in Charge Jonathan D. Larsen. “In this case, Adel Kellel attempted to evade his taxes by diverting funds for personal use and failing to report substantial gross receipts. IRS-Criminal Investigation will continue to serve the American taxpayer by investigating individuals who hide their true income from the IRS.” According to the allegations contained in the information to which Kellel pled guilty, documents filed in court, and statements made in court: In 2011, Kellel was the President and a 45 percent owner of K&H Restaurant Inc. (K&H), which operated Raffles Bistro (Raffles), a coffee-shop and full service restaurant then located in a Manhattan hotel (the Hotel). From 2012 through 2015, Kellel was the 100 percent owner of K&H. From 2011 to 2015, Kellel filed false personal returns and corporate returns for K&H, and evaded his taxes by diverting and failing to report substantial gross receipts to the IRS For example, as part of his tax evasion scheme, Kellel diverted over 150 hotel checks, totaling over $2.1 million or approximately 43 percent of the Hotel payments K&H received by check, and then hid the gross receipts from his accountants and the IRS by depositing the checks into more than a dozen undisclosed bank accounts. These included personal accounts that Kellel held either individually or jointly with his wife, as well as accounts held in the name of K&H, some of which were opened solely to have an additional place to deposit diverted checks. Kellel also diverted substantial cash income received from Raffles’ customers, a portion of which he deposited into personal bank accounts or spent directly on personal expenses, again, without disclosing to his accountants or paying taxes. Kellel used the diverted income for personal expenses, including overseas transfers; condominium fees; rent for a high-end Manhattan apartment; college tuition payments for his children; luxury retailers, such as Hugo Boss and Saks Fifth Avenue; Mercedes, Porsche, and Maserati vehicles; and domestic and international travel. On Jan. 24, 2020, Kellel pled guilty to one count of tax evasion relating to the 2011 to 2015 tax years. In total, Kellel caused a combined tax loss of at least approximately $771,195 to the IRS and the New York State Department of Taxation and Finance (NYSDTF). In addition to the sentence of imprisonment, the court ordered Kellel to pay restitution of $613,478 to the IRS and $157,717 to NYSDTF. Kellel was also ordered to serve three years of supervised release after completing his jail sentence. Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Strauss praised the efforts of IRS-CI in the investigation. Trial Attorney Jorge Almonte of the Tax Division and Assistant U.S. Attorney Olga I. Zverovich are in charge of the prosecution.

Don’t Let This Happen To You

Selig & Associates Free consultation (in person or telephonic) with Federal Tax Practitioner, CPCU and Attorney. Our offices are conveniently located in New York City and emergency appointments are always available. Practice limited to Tax Representation and Insurance Premium Audits.

Effective Tax Advocacy Negotiating affordable repayment plans and realistic tax settlements since 2006. Practicing before Internal Revenue Service and the New York State Department of Taxation and Finance. We effectively resolve unpaid income, sales and payroll tax problems. Call us today at (212) 974-3435 or contact us Online.

 

Insurance Audits and Premium Increases  We successfully challenge Workers' Compensation premium increases, payroll discrepancies, employee misclassification, experience and other rating issues. Additionally if your Business pays over $50,000 for W/C Insurance, you may be entitled to a large premium refund. For more information, call us directly or contact us Online. 

 

(212) 974-3435

Medical Doctor Sent to Slammer [because] He Failed to Pay Employment Taxes

 

 

A dejected Medical Doctor was just sentenced in the United States District Court to serve six months in prison after pleading guilty to Failure to Pay Employment Taxes. The despondent Doctor was also ordered to serve three years of supervised release, pay a $10,000 fine, and a $100 special assessment to the Crime Victims' Fund. And if that wasn’t enough, he was also ordered to pay $721,394.34 in restitution (which he has already paid in full).

If you’ve fallen behind with your payroll withholding responsibilities, you’re in trouble. To schedule a FREE legally privileged consultation, call (212) 974-3435 today. 

Effective Tax Advocacy Negotiating affordable repayment plans and realistic tax settlements since 2006. Practicing before Internal Revenue Service and the New York State Department of Taxation and Finance. We effectively resolve unpaid income, sales and payroll tax problems. Don't Delay, Call Today.