Press Release
Oregon Strip Club Operators Sentenced to Prison for Conspiring to Defraud the IRS
For Immediate Release
Office of Public Affairs
Maintained Double Set of Books to Conceal $1.5 Million and Evade $650,000 in Taxes
Three family members who operated Portland, Oregon area strip clubs were sentenced to prison today for conspiring to defraud the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Billy J. Williams for the District of Oregon.
David Kiraz, 34, of Happy Valley, Oregon, was sentenced to serve 36 months in prison, George Kiraz, 56, of Portland, was sentenced to serve 36 months in prison and Daniel Kiraz, 32, of Portland, was sentenced to serve 12 months and one day in prison, for hiding $1.5 million in income from the IRS and evading more than $650,000 in income taxes.
“Skimming cash and keeping two sets of books cheats not only the United States, but also honest taxpayers that play by the rules and pay their fair share of taxes,” said Principal Deputy Assistant Attorney General Ciraolo. “The department and the IRS will continue to make the investigation and prosecution of tax evaders like David, George and Daniel Kiraz, a top priority.”
“These sentences are significant sanctions for serious crimes,” said U.S. Attorney Williams. “Business owners who deal extensively in cash have the same legal obligation to pay their fair share of taxes as does everyone else. The U.S. Attorney’s Office and IRS will continue to work together to identify and prosecute those who cheat the tax system.”
“Our nation’s tax system funds many government services to include our military, infrastructure and other vital services, so essentially, the Kiraz’s weren’t just cheating the IRS, they were cheating the men and women of our armed forces, anyone who drives our highways and those who rely on any number of social services for their well-being,” said Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “Moreover, besides depriving the U.S. Treasury, tax scoffs shift their tax burden to every taxpayer who pays an honest tax, essentially robbing each and every one of us.”
In May, David Kiraz, his father George D. Kiraz and David’s brother Daniel Kiraz were convicted of conspiracy to defraud the IRS and charges related to filing false tax returns. The Kirazes operated two strip clubs in the Portland area, Cabaret Lounge I and Cabaret Lounge II. From 2007 through 2010, the Kirazes’ strip clubs collected more than $1.5 million in cash door charges and dancer stage fees. The Kirazes maintained a double set of books, tracking these charges and fees in one set of books that was stored at David Kiraz’s residence, and omitting the receipts in a second set of books that the Kirazes provided to their return preparers, intentionally causing them to prepare and file false income tax returns for David Kiraz that failed to report between $330,000 and $460,000 in door and stage fees each year. The defendants evaded more than $650,000 in federal and state income taxes for tax years 2007 through 2010.
In addition to the prison terms imposed, George and David Kiraz were also ordered to serve three years of supervised release and to pay more than $650,000 in restitution to the IRS and the Oregon Department of Revenue. Daniel Kiraz was ordered to pay more than $125,000 in restitution.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Leslie A. Goemaat of the Justice Department’s Tax Division and Assistant U.S. Attorneys Seth D. Uram and Quinn P. Harrington, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Updated February 5, 2025
Topic
Tax
Component