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Justice News

Department of Justice
U.S. Attorney’s Office
District of Minnesota

FOR IMMEDIATE RELEASE
Friday, September 14, 2012

Two Individuals Sentenced For Tax Crimes

MINNEAPOLIS—Yesterday in federal court, the owner of Hi-Lake Liquors in Minneapolis
was sentenced for federal tax evasion. United States District Court Judge Ann D. Montgomery
sentenced Luke Jacob to three years of probation and ordered him to pay a $20,000 fine. On
May 9, 2012, he pleaded guilty to one count of tax evasion. He was charged on March 21,
2012.

In his plea agreement, Jacob admitted he filed a false tax return for tax year 2008, when he
failed to report more than $486,000 in taxable income. This understatement of income resulted
in a tax loss to the Internal Revenue Service (“IRS”) of $75,488.

This case was investigated by the IRS-Criminal Investigation Division. It was prosecuted by
Assistant U.S. Attorneys Timothy Rank and Surya Saxena.

On September 11, 2012, a Twin Cities’ man was sentenced for failing to file taxes, knowing
that at least a portion of the income subject to tax had been obtained through investment scams.
United States District Court Chief Judge Michael J. Davis sentenced John Marc Mulcahey to
two years of probation, 200 hours of community service, and ordered him to pay restitution to
the IRS. Mulcahey, who was charged on May 10, 2012, pleaded guilty to two counts of failure
to file a tax return on June 13, 2012.

In his plea agreement, Mulcahey admitted that for tax years 2008 and 2009, he failed to file
income tax returns with the IRS. For those years, he owed approximately $9,779 in unpaid
taxes. During that time, at least part of Mulcahey’s income was obtained from investment
scams orchestrated by Michael Joseph Krzyzaniak. Those scams bilked investors out of more
than $20 million. In February of 2012, Krzyzaniak, also known as Michael Joseph Crosby, was
sentenced to 151 months in federal prison on one count of wire fraud and one count of income
tax evasion in connection to those scams, which lured people into investing money in ventures
never completed, including a golf resort in California, alternative energy projects in Colorado,
and a Nascar-type race track in Elko, Minnesota, among other projects.

Mulcahey personally benefitted from the scams. In addition to owing an estimated $9,779 in
unpaid federal taxes for 2008 and 2009 combined, Mulcahey admitted he failed to pay
$34,997.20 in federal income taxes owed for 2005 through 2007.

This case was the result of an investigation by the IRS-Criminal Division, the Federal
Bureau of Investigation, and the U.S. Postal Inspection Service. It was prosecuted by Assistant
U.S. Attorney Christian S. Wilton.

Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.

 

 

Updated April 30, 2015