Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
MONDAY, MARCH 10, 2008
WWW.USDOJ.GOV
TAX
(202) 514-2007
TDD (202) 514-1888

D.C. GROCERY OWNER PLEADS GUILTY TO TAX CRIMES INVOLVING OVER $500,000 IN UNPAID PAYROLL & SALES TAXES

WASHINGTON Stephen B. Cohen of Washington, D.C. pleaded guilty today to a two-count information charging violations of tax crimes for his willful failure to collect and pay over $500,000 of payroll and sales taxes, the Justice Department announced. Cohen owned several businesses in the D.C. area, including Washington Park Gourmet, a delicatessen and grocery store.

According to the plea agreement, from June 1997 through December 2003, Cohen withheld payroll taxes from his employees’ paychecks but failed to pay over those taxes to the Internal Revenue Service (IRS). He also owned Western Market, a grocery store in Bethesda, Md. He pleaded guilty to withholding payroll taxes from his Western Market employees’ paychecks for 16 years while failing to pay over those taxes to the IRS as well. He also failed to pay sales taxes owed to the D.C. government.

Sentencing is scheduled for July 10, 2008. According to court documents, Cohen failed to timely file his federal individual income tax returns for tax years 1996 through 2006 and, despite residency in the District of Columbia, failed to file D.C. income tax returns for 2003 to the present.

According to documents filed with the court, the tax loss including federal and District of Columbia taxes is approximately $580,000.

Cohen faces a maximum sentence of up to 5 years in prison and a $250,000 fine on the federal charges, and an additional maximum sentence of up to 180 days in prison on the District of Columbia charges.

“Employers have a fiduciary responsibility to comply with employment tax laws,” said Eileen Mayer, Chief, IRS, Criminal Investigation. “IRS will continue to be aggressive in identifying and investigating these types of crimes that only enrich some greedy individuals, which result in a loss of tax revenue to the United States government and the loss of future Social Security or Medicare benefits for the employees.”

“Employers who attempt to scam the payroll tax system cheating the government out of its tax revenue and employees out of money withheld from their paychecks will be investigated and prosecuted to the full extent of the law,” said Nathan Hochman, Assistant Attorney General for the Tax Division.

Hochman credited IRS-Criminal Investigation and the D.C. Office of Tax and Revenue for their efforts in investigating this case. Tax Division trial attorneys Shawn Noud and Jerrod Patterson prosecuted the case.

More information about the Justice Department’s efforts against income tax evaders can be found at http://www.usdoj.gov/tax/taxpress2007.htm.

 

 

 

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