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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Alabama

FOR IMMEDIATE RELEASE
Tuesday, May 24, 2016

Owner of Pizza Franchises Pleads Guilty to Submitting False Tax Return that Omitted Income from Skimmed Cash

BIRMINGHAM – The owner and operator of dozens of pizza franchise restaurants in Alabama, Georgia and Louisiana pleaded guilty today in federal court to filing a false federal income tax return that did not include money he skimmed from his Little Caesars restaurants, announced U.S. Attorney Joyce White Vance and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.

RAMON S. ARIAS, 64, of Mountain Brook, entered his plea before Chief U.S. District Judge Karon O. Bowdre to one count of making a false tax return. In accordance with a plea agreement between Arias and federal prosecutors, Arias must pay $224,290 in restitution to the IRS, and cooperate with the IRS Civil Division in filing accurate amended tax returns for 2010 through 2013. He is scheduled for sentencing Oct. 4.

Arias owned, controlled and operated 26 to 45 Little Caesars franchises in the three states from 2010 through 2013, according to his plea. The stores were incorporated under various business names, with other individuals owning percentages of the businesses, but Arias was primarily responsible for running the businesses and managing the finances.

Arias operated a scheme to divert cash from the gross receipts of some of the businesses, primarily two to four of the restaurants in Alabama, during the four years, according to his plea. Arias used a certified public accountant to prepare his business and individual income tax returns, but did not provide the accountant with any information about the skimmed money.

            The amounts of skimmed cash under-reported on Arias’ individual returns for 2010, 2011, 2012 and 2013 were $238,664, $265,413, $312,955 and $287,023, respectively, according to Arias’ plea agreement.

            The maximum penalty for making a false tax return is three years in prison and a $250,000 fine.

IRS-CI investigated the case, which Assistant U.S. Attorney J. Patton Meadows is prosecuting.

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Topic(s): 
Tax
Updated June 9, 2016