Adult Entertainment Consultant Headed To Federal
Prison On Tax Charges
Francis Sharrak, 44, of Farmington Hills, Michigan, was sentenced yesterday to 72 months imprisonment, followed by 3 years of supervised release, announced United States Attorney Barbara L. McQuade. This sentence was imposed as the result of a 2010 trial conviction by a federal jury on tax evasion and three counts of failing to file tax returns.
United States Attorney McQuade was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
In addition, United States District Court Judge Robert H. Cleland also ordered Sharrak to pay a special assessment of $175 and restitution, including interest and penalties, to the IRS of $4.2 million due immediately.
According to court records, during the tax years 1997 through 2005, Sharrak earned millions of dollars in taxable income by running and promoting adult websites, spamming millions of email addresses, and consulting for adult entertainment dance clubs. Some of these clubs included Platinum Show Girls, Toledo, Ohio, and Spanky's Club, Dayton, Ohio. In 2003, Sharrak filed his 1997 through 2001 tax returns, reporting over $3.7 million in income with $1.4 million in taxes owed to the IRS. He also submitted an Offer in Compromise to the IRS to settle his tax debt for an amount that was far less than the tax admittedly he owed. That offer was not accepted, and Sharrak then failed to file tax returns for the years 2003 through 2005, during which he received more than an additional $1.4 million in income.
According to court records, the IRS attempted to collect Sharrak's tax due and owing through liens and levies, however, Sharrak was able to derail their attempts by concealing his assets, using nominees, and making false statements to IRS agents. Knowing that he owed the IRS a significant amount of tax, Sharrak continually paid himself in cash from the accounts of the adult entertainment clubs he ran, gambled at casinos with large sums of money drawn from those same accounts, and used financial accounts he controlled that were in the names of nominees to pay his bills. He also leased and purchased high-end vehicles in other people's names, which included a 2003 Mercedes Roadster, a 2003 Pace Arrow Motor Home, and a 2001 Chevrolet Corvette. Interest and penalties have continued to accrue since 2001 on the original $1.4 million in taxes owed to the IRS and now the total tax debt exceeds $4 million.
"Sharrak cheated the American public out of $1.4 million. He did this on purpose, by concealing his assets and lying to IRS agents. Sharrak blatantly wasted the time of IRS agents and taxpayer dollars. A federal jury of his peers found him guilty and the judge has now held him fully accountable," said Special Agent in Charge Erick Martinez.
This case was investigated by special agents of the IRS Criminal Investigation and prosecuted by Assistant United States Attorney Carl D. Gilmer Hill.