Bethesda Home Improvement Contractor Pleads Guilty to Tax Evasion
Failed to Report More Than $1.4 Million in Income from 2001 to 2004
Kept Close to $1 Million in Cash in a Safe Deposit Box
Greenbelt, Maryland - Jeffrey Sarris, age 48, of Bethesda, Maryland, pleaded guilty today to tax evasion, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
“Business owners who evade taxes gain an unfair advantage over law-abiding taxpayers,” said U.S. Attorney Rod J. Rosenstein.
According to the plea agreement, since 2000, Sarris has operated Bethesda Home Improvement Corporation (“BHIC”), a home improvement/contracting company conducting business primarily in Maryland and the District of Columbia. Prior to operating BHIC, Sarris had operated another business, Home Improvement Corporation, and the IRS seized Sarris’ 1996 personal tax refund to satisfy a 1993 tax lien relating to that corporation. IRS records establish that Sarris failed to file individual income tax returns for 1994, 1995 and 1997 through 2003 and failed to file employment tax forms for BHIC until 2002.
Beginning no later than 2001, BHIC and Sarris contracted with homeowners to build or renovate homes. Sarris cashed BHIC customers’ payment checks at a restaurant in Rockville, Maryland, negotiating more than $884,000 in checks in 2002, more than $957,000 in 2003 and more than $1,246,000 in 2004. Sarris saved large amounts of cash in a safe deposit box and did not maintain a personal bank account. Sarris frequently used cash in the day-to-day business activities of BHIC, including paying employees in cash, using cash to pay all or a portion of subcontractors’ bills, to purchase building materials from suppliers, and to reimburse his family for obtaining credit for BHIC.
Sarris did not respond to IRS notices of tax delinquencies and deficiencies relating to his personal and business employment tax returns from 1988 through 2003. In May 2005, during an interview with an IRS Revenue Agent, Sarris made several false statements, including denying that he had accumulated cash savings, denying cashing checks at the restaurant in Rockville, and claiming that he deposited all checks into his business bank account.
After meeting with the IRS, on September 19, 2005, Sarris removed the cash from his safe deposit box and purchased checks, which he used to pay $900,000.09 of his personal and BHIC’s employment tax liabilities (including interest and penalties on both) and an estimated tax payment for 2005. Sarris admitted that for the years 2000 through 2004, he failed to report $1,424,754 in income and was responsible for a total tax loss of $981,549.93.
Sarris faces a maximum sentence of five years in prison, followed by three years of supervised release and a $250,000 fine. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for December , 2008 at 9:30 a.m.
United States Attorney Rod J. Rosenstein thanked the Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorney Stuart A. Berman, who is prosecuting the case.