Subway Franchisee and Shell Gas Station Owner Sentenced for Multi-Million Dollar Conspiracy to Defraud the IRS
ALEXANDRIA, Va. – Obayedul Hoque, 49, of Alexandria, was sentenced today to 30 months in prison for aiding and assisting in the filing of false tax returns. Hoque was also sentenced to two years of supervised release and oreder to pay $2,022,106 in restitution to the Internal Revenue Service (IRS).
According to court documents, Obayedul Hoque owned and operated Skyhill Shell, a gas station in Alexandria, and multiple Subway restaurant franchises in Washington, D.C., and Arlington, and Alexandria. Hoque admitted that between 2008 and 2014, he and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the IRS in the ascertainment and collection of individual and corporate income taxes. Hoque and his co-conspirators did not deposit all of the gross receipts of the gas station or the Subway franchises into the corporate or partnership bank accounts. Instead, Hoque and the managers retained a portion of the gross receipts for their personal benefit and failed to report those funds to the IRS. For the Subway franchises that had no co-conspirator managers, Hoque retained all of the unreported gross receipts for himself.
For the period of 2008 through 2013, point of sales records for the Subway franchises reflected total sales of $20,805,667. However, Hoque and his co-conspirators provided false monthly sales figures to the accounting firm to prepare the Subway entities’ tax returns. As a result, Hoque and his co-conspirators caused false corporate and partnership tax returns to be filed for the Subway franchises which reported sales of only $14,377,696. Hoque and his co-conspirators also caused false corporate tax returns to be filed on behalf of Skyhill Shell. For some years, some of the entities did not file tax returns with the IRS. Additionally, Hoque filed false individual income tax returns with the IRS. Hoque admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division, made the announcement after sentencing by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Uzo Asonye, Assistant Chief Caryn Finley and Trial Attorney Kimberly Shartar of the Tax Division prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-9.