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Brian Farah and His Father Skimmed $400,000 from their Bars and Destroyed Sales Records to Hide the Crime from the IRS
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that Brian Farah, age 42, of Grand Rapids, Michigan, was sentenced to thirteen months in federal prison for obstructing an IRS audit. U.S. District Judge Paul L. Maloney also ordered that Farah pay restitution, a $5,000 fine, and serve one year on supervised release after his prison sentence. Farah and his father, Michael, previously pled guilty to the charge, admitting that they deleted business records after receiving notice of an Internal Revenue Service audit. Michael Farah will be sentenced in July.
Brian Farah and his father own three Grand Rapids area bars: Farah’s, Kuzzin’s, and Drake’s. In 2013, they skimmed $232,000 in cash from the bars, which they did not report on their business tax returns or individual tax returns. In 2014, they skimmed $176,000 in cash from the bars, which they again did not report on their tax returns. After receiving notice of an audit, they tried to hide their crime by deleting all of the bars’ sales records. They were caught when their sales software provider informed the IRS of the deletion.
Judge Maloney said Brian Farah’s conduct, which included "systematic and deliberate" destruction of business records and "lying directly to the face of an IRS agent," was a "blatant" violation of the tax laws.
"Schemes to conceal and insulate wealth in order to evade income tax, such as Brian Farah’s scheme, are unfair to every taxpayer who obeys the law and pays their fair share," said IRS-Criminal Investigation Special Agent in Charge Manny Muriel of the Detroit Field Office. "The public should know that IRS Criminal Investigations will do everything we can to hold individuals accountable to the same tax laws that they are subject to, ensuring that our tax system is fair to everyone."
This case was investigated by IRS Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Clay Stiffler.