Kirkland, Washington Business Owner Sentenced to 5 Years in Prison for Two Decade Scheme to Avoid Paying Income Taxes
Set up Fraudulent Corporations, Filed Frivolous Claims and Sent Forged Money Orders to Evade Taxes
The owner of a Kirkland, Washington interior design business was sentenced today in U.S. District Court in Seattle to five years in prison for 25 federal felonies related to a twenty-two-year scheme to avoid paying more than $560,000 in income taxes, announced U.S. Attorney Annette L. Hayes. DANIEL NIX, 58, was convicted following a four-day jury trial of 13 counts of tax evasion, 11 counts of providing fictitious financial obligations, and one count of corrupt interference with the administration of the Internal Revenue Code. At sentencing U.S. District Judge Robert S. Lasnik ordered NIX to pay restitution of $851,904 representing back taxes and interest.
According to the indictment and testimony at trial, NIX operates Dannix Design, an interior design firm for medical offices. As early as 1998 and from 2000 to 2013, NIX refused to pay his taxes on $3.9 million in gross income, and $1.9 million in net profit. NIX sought to evade more than $560,000 in federal income and self-employment taxes. For tax years 2010-2013, for example, NIX continued to use a variety of strategies to hide his income and evade his tax obligations. He set up sham religious entities and transferred assets into the names of those sham religious entities, in order to frustrate IRS efforts to put liens on his assets.
NIX enjoyed a lavish lifestyle with the proceeds of his crime. He owns a Kirkland home assessed for more than $1 million. He bought and owned at least 16 luxury vehicles over the years, including a Porsche, a Jaguar, a BMW, a Ford F-150, multiple Mercedes-Benz, Harley Davidsons, and imported motorcycles.
In February 2013, NIX paid an Arizona man to send eleven fake money orders to the IRS to make it appear he was paying his tax obligations. The total face value of the eleven fake money orders exceeded a million dollars. On several occasions, NIX harassed IRS and Department of Revenue agents, filing fraudulent liens against them. He also called other unrelated individuals who were subject to IRS liens and falsely claimed the liens filed by the government were invalid.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorneys Seungjae Lee and Mark Parrent.