Pharmacy Owner Sentenced to Federal Prison for Filing False Tax Returns in Connection With More Than $1-Million Tax Loss

Baltimore, Maryland – Today, Judge James K. Bredar sentenced Moshe Gabay, 55, of Baltimore, Maryland, to one year and one day in federal prison, followed by one year of supervised release, and a $100 special assessment, for filing false tax returns with the Internal Revenue Service (IRS). Judge Bredar also ordered Gabay — a Baltimore pharmacy owner — to pay the IRS $1,039,585 in restitution. On the fraudulent tax returns, Gabay underreported his income by more than $3.5 million which meant he owed more than $1 million in taxes.   

Kelly O. Hayes, U.S. Attorney for the District of Maryland, announced the sentence with Special Agent in Charge Kareem Carter, Internal Revenue Service – Criminal Investigation (IRS-CI), Washington D.C. Field Office.

In his guilty plea, Gabay acknowledged that he owned and operated SINU-RX Pharmacy Inc. (SINU-RX), located in Baltimore.  Gabay controlled SINU-RX’s finances and was responsible for directing interactions and providing information to SINU-RX’s bookkeepers and tax preparers.

From tax years 2017 through 2022, Gabay’s tax returns were filed on his behalf. Gabay’s tax returns included Form 1120S, U.S. Income Tax Return for an S Corporation, for SINU-RX and Form 1040, U.S. Individual Income Tax Return.

Prior to the filing of the returns, Gabay intentionally and knowingly provided information to his bookkeepers and tax-return preparers that falsely categorized funds taken from SINU-RX. These funds were listed as business expenses, specifically for the cost of goods sold. But Gabay had diverted these funds to himself for his personal use.  As a result, Gabay underreported his income by more than $3.5 million which meant he owed more than $1 million in taxes.  Pursuant to the guilty plea, Gabay agreed to pay restitution of more than $1 million.

U.S. Attorney Hayes commended the IRS-CI for its work in the investigation.  Ms. Hayes also thanked Special Assistant U.S. Attorney Jared W. Murphy and Assistant U.S. Attorney Matthew P. Phelps, who prosecuted the federal case, and Paralegal Specialist Joanna B.N. Huber for her valuable assistance.

For more information about the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, visit justice.gov/usao-md and justice.gov/usao-md/community-outreach.

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