Orange County Car Dealership Owners Charged with Fraud, Conspiracy After Filing False Tax Returns

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Orange County Car Dealership Owners Charged with Fraud, Conspiracy After Filing False Tax Returns

tax audit and tax evasion

In a press release issued August 2, 2019 by the U.S. Department of Justice, the DOJ announced the indictment of father-son duo Mehdi and Saeed Moslem, who operated an auto dealership in Orange County, California. Orange County Car Dealership Owners Charged with Fraud, Conspiracy After Filing False Tax Returns According to the press release, father and son are charged with an array of felony financial crimes, including bank fraud and conspiracy to defraud the United States. Investigators allege that the pair willfully understated income on federal tax returns, simultaneously exaggerating their dealership’s net worth in order to obtain business loans. Though the defendants have not been charged with tax crimes (such as tax evasion or willful failure to file), the IRS Criminal Division (IRS-CI) played a significant role in the investigation, with IRS-CI Special Agent in Charge Jonathan D. Larsen cautioning taxpayers, “Today’s arrests show that underreporting business gross receipts to conceal millions of dollars of income is a serious criminal offense.” He continued, “IRS Criminal Investigation will pursue those individuals who break the law and violate the American tax system.”

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Defendants Facing Decades of Prison Time After Underreporting Income, Defrauding U.S.

The co-defendants, whose cases are being heard by U.S. Magistrate Judge Lisa Margaret Smith, have been charged with a handful of serious offenses, including the following crimes:

  • Son Saeed Moslem, 35, has been charged with (1) one count of conspiracy to defraud the United States, (2) one count of bank fraud conspiracy, (3) two counts of making false statements to a bank or lender, and (4) one count of bankruptcy fraud, which involves concealing or undervaluing assets.
  • Father Mehdi Moslem, 70, has been charged with (1) one count of conspiracy to defraud the United States, and (2) one count of bank fraud conspiracy.

The maximum sentence for conspiracy to defraud the U.S. is five years in prison. Each count of bank fraud conspiracy is punishable by up to 30 years in prison, a sentence six times longer. Up to 30 years of prison time may also be sentenced for making false statements to lenders, while bankruptcy fraud is punishable by up to five years. When determining what sort of sentence is appropriate within the federal sentencing guidelines, judges consider factors like the severity of the offense, a defendant’s criminal history (if any), and a defendant’s personal and professional background.

“Whether allegedly understating or overstating,” said U.S. Attorney Geoffrey S. Berman, “father and son were falsifying – and committing crimes” in the process. These crimes were allegedly committed over the following periods:

  • From 2009 to 2016, the defendants allegedly failed to report income to the IRS.
  • From 2011 to 2017, the defendants allegedly lied to various lenders, obtaining at least one loan in excess of $1 million (on which they later defaulted).
  • In 2015, Saeed Moslem filed for bankruptcy, at which point he allegedly hid assets from creditors in order to avoid repaying certain debts. Bankruptcy rules require debtors to truthfully disclose their assets, so that bankruptcy trustees can ensure creditors are repaid fairly.

Tax Evasion and IRS Audit Defense Attorneys for Car Dealerships in California

Echoing the words of Agent Larsen, FBI Assistant Director William F. Sweeney, Jr. had a stern warning for taxpayers: “The popular saying about certainties in life omits a third guarantee – when the FBI and IRS catch you engaging in fraudulent behavior and illegal business practices, you will be charged.” A glance at IRS criminal statistics – particularly those on convictions and sentencing – confirms that this is not an idle threat. The IRS, FBI, and DOJ work in tandem, sharing technology and information to unravel even the most complex tax fraud schemes. In most cases, the end result is a finding of “guilty” – and a lengthy prison sentence to accompany it, along with high fines, IRS restitution, and supervised release.

If you are under investigation for tax crimes or white collar crimes, or if you have been chosen for a tax audit, the time to consult with a tax attorney is now. IRS audit representation is especially important for auto dealership owners, who are at elevated risk of being singled out by the Service. To speak confidentially with a tax audit lawyer for car dealerships, or with an income tax evasion attorney in Orange County, contact the Tax Law Offices of David W. Klasing online, or call today at (800) 681-1295 for a reduced-rate consultation.

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Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San BernardinoSanta BarbaraPanorama CityOxnardSan DiegoBakersfieldSan Jose, San FranciscoOakland and Sacramento.

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