Massachusetts Restaurant Owners Charged With Tax Fraud
A federal grand jury in Boston, Massachusetts, returned an indictment charging three restaurant owners with conspiracy to defraud the United States and filing false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
The indictment charges Massachusetts residents, Ayaz Ali Shah of Dedham, Massachusetts, Muhamad Siyab Khan and Khurshed Jehan Badshah, both of Dorchester, Massachusetts, with conspiring to defraud the United States by impeding the lawful functions of the Internal Revenue Service (IRS). Shah and Badshah also are each charged with two counts of willfully filing their own false individual income tax returns for tax years 2012 and 2013. Khan is charged with two counts of aiding and assisting in the preparation and presentation of his own false and fraudulent tax returns for tax years 2012 and 2013.
According to the indictment, from 2009 through 2014, Shah, Khan, Badshah, and an unindicted co-conspirator, co-owned and operated a carry-out restaurant “New York Fried Chicken and Pizza” in Dorchester, Massachusetts. Shah, Khan, and Badshah each allegedly owned twenty percent of the business while the unindicted co-conspirator owned the other forty percent. The indictment alleges that during this time period, the co-conspirators agreed to underreport the business’s gross receipts, cost of goods sold, and net profit and to report these false amounts on Shah’s 2012 and 2013 individual income tax return, thereby concealing the business’s true partnership nature from the IRS. Khan and Badshah allegedly filed false 2012 and 2013 tax returns that failed to report their gross income.
If convicted, Shah, Khan, and Badshah face a maximum sentence of five years in prison on the conspiracy charge and a maximum sentence of three years in prison on each count of willfully filing a false tax return or aiding and assisting in the preparation and presentation of false and fraudulent tax returns. The defendants also face a period of supervised release, restitution and monetary penalties.
An indictment merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS Criminal Investigation, FBI, Boston Division, U.S. Immigration and Customs Enforcement's Homeland Security Investigations (HSI) and the Boston Police Department, who conducted the investigations, and Trial Attorneys Thomas Voracek and Mark McDonald of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.