Restaurant Owners from Virginia Face Charges for Tax Evasion

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The U.S. government treats tax evasion very seriously. If you illegally evade your tax obligations, you may face serious civil tax penalties and or criminal tax prosecution.

For example, a pair of restaurant owners in Virginia are facing criminal charges for committing tax evasion and stealing from pandemic relief funds. For their actions, they may have to pay extensive fines and serve time in prison. It is crucial for defendants who have been accused of tax crimes, or those who wish to remove exposure for it… to seek qualified legal representation as soon as possible.

If you need help dealing with an eggshell audit, reverse eggshell audit, fighting a charge of tax evasion, seek guidance from our Dual-Licensed Civil and Criminal Tax Defense Lawyers & CPAs by calling the Tax Law Offices of David W. Klasing at (800) 681-1295 or click here to schedule a reduced rate initial consultation online.

D.C. Restaurant Owners Charged with Stealing Pandemic Relief Funds and Evading Tax Obligations

A couple from Virginia, Gholam “Tony” Kowkabi, 63, and Karen Kowkabi, 64, are facing multiple criminal charges as a result of their failure to pay more than $1.35 million in taxes and embezzling COVID relief funds. They operated as proprietors of several restaurants in the Washington, D.C. region. Tony Kowkabi admitted guilt to stealing over $738,000 from the emergency small business relief funds received by his restaurant, Ristorante Piccolo, during the pandemic. He used this money for personal purposes, including purchasing a waterfront condo, family vacations, personal investments, and college tuition. Tony Kowkabi also confessed to engaging in an intricate scheme to conceal assets and manipulate the IRS to evade the payment of owed taxes.

In addition to admitting to stealing relief funds, Tony Kowkabi pleaded guilty to wire fraud and tax evasion. Both crimes can be met with significant penalties, including expensive fines and jail time. Karen Kowkabi, on the other hand, pleaded guilty to five counts of willful failure to pay taxes, which carries a statutory penalty of one year and financial repercussions. The U.S. Attorney, Graves, strongly condemned the defendants’ actions, asserting that Tony Kowkabi’s actions exploited a program designed to aid struggling businesses during the pandemic. He emphasized the intolerability of fraud against the government and the misuse of relief funds, stating that such actions would be prosecuted. The couple is set to be sentenced on December 1, 2023, with the ultimate sentence to be determined by a federal district court judge, who will consider various factors, including U.S. Sentencing Guidelines and other relevant statutory elements.

It is crucial for defendants who have been charged with tax and COVID relief crimes to seek legal support right away. If you have been accused of such a crime, or merely fear having exposure to it, then our Dual-Licensed Civil and Criminal Tax Lawyers & CPAs can help build your defense and fight to ensure that your rights are protected.

What to do if you Know for a fact you Have Committed Tax Crimes and want to Avoid Criminal Tax Prosecution.

If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.

Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation/prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney-Client Privilege and Work Product Privileges that will prevent the very professional that you hire from potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

Factors Used to Determine Sentences for Tax Crimes

When determining sentences for tax crimes, judges will analyze a variety of circumstances surrounding the cases at hand. For instance, the following are all key factors that may be considered when penalties are assessed:

Severity of the Offense

The severity of a tax crime is a crucial factor that judges carefully consider when determining the appropriate sentence. This involves evaluating the extent of financial harm (Tax Loss) caused by the offense, the amount of money involved, and whether the actions were part of a larger pattern of fraudulent behavior. Cases involving substantial amounts of unpaid taxes or deliberate attempts to evade taxes are generally viewed as more serious and may result in more severe penalties. The impact of the offense on the government’s revenue and financial stability also plays a role in this assessment.

Criminal History

Judges consider the defendant’s criminal history to gauge their propensity for engaging in unlawful activities. Prior convictions for tax-related offenses or other forms of financial fraud may indicate a pattern of behavior that could influence the sentencing decision. A defendant with a history of similar crimes is more likely to receive a harsher sentence than someone with no prior record. Conversely, a clean criminal record might be seen as a mitigating factor, potentially leading to a less severe sentence.

Intent and Motivation

Understanding the intent and motivation behind a tax crime is essential for determining the appropriate sentence. Judges assess whether the defendant committed the offense knowingly and intentionally. Cases involving deliberate attempts to deceive tax authorities or manipulate financial records typically result in more severe sentences. On the other hand, if the defendant’s actions resulted from negligence or lack of understanding of tax laws, the judge might consider this when deciding the punishment. Intent can significantly impact the defendant’s level of culpability and thus influence the sentencing outcome.

Restitution and Repayment

A defendant’s efforts to make amends by repaying owed taxes or restitution to victims can impact the sentencing decision. Judges often appreciate actions that demonstrate a commitment to rectifying the financial harm caused by the tax crime. Whether through repayment plans, restitution agreements, or other means, showing an active willingness to address the consequences of the offense may lead to a more favorable sentencing outcome. This factor showcases a sense of responsibility and accountability that can influence the judge’s decision.

Circumstances and Context

The circumstances surrounding a tax crime are carefully evaluated by judges during the sentencing process. This includes examining the defendant’s personal and financial situation, family responsibilities, employment history, and any other contextual factors that might have contributed to their actions. Mitigating circumstances, such as financial hardships or personal crises, can be considered to provide a more nuanced understanding of the defendant’s motivations. However, judges also weigh these circumstances against the seriousness of the offense and the need for deterrence.

Use of Fraudulent Methods

The methods employed by the defendant to commit the tax crime are significant factors that judges consider. Cases involving complex or sophisticated schemes to evade taxes or defraud the government are often viewed more harshly. The level of planning and organization involved in carrying out the offense can indicate a higher degree of culpability. Judges may consider such factors when determining the appropriate sentence, as these methods reflect the defendant’s intent to deceive and manipulate the system.

Sentencing Guidelines

In some jurisdictions, sentencing guidelines provide recommended ranges of sentences for specific offenses, including tax crimes. While judges have discretion in sentencing, these guidelines offer a framework that helps ensure consistency and fairness in sentencing decisions. Judges consider the guidelines as a reference point, considering the specifics of the case and any relevant aggravating or mitigating factors. While not strictly binding, the guidelines serve as a valuable tool for judges to determine an appropriate and just sentence based on established standards.

Mitigating and Aggravating Factors

During the sentencing process, judges assess both mitigating factors that could warrant a less severe sentence and aggravating factors that might justify a more severe punishment. Mitigating factors can include cooperation with authorities, minimal harm caused, lack of a prior criminal record, and expressions of remorse. Aggravating factors could involve deliberate and premeditated actions, significant financial harm, multiple offenses, and attempts to obstruct justice. Evaluating these factors helps judges arrive at a well-balanced and equitable sentencing decision that takes into account the specifics of the case and the principles of justice.

We Are Here for You

Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

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Restaurant Owners from Virginia Face Charges for Tax Evasion

D.C. Restaurant Owners Charged with Stealing Pandemic Relief Funds and Evading Tax Obligations

What to do if you Know for a fact you Have Committed Tax Crimes and want to Avoid Criminal Tax Prosecution.

Factors Used to Determine Sentences for Tax Crimes

Severity of the Offense

Criminal History

Intent and Motivation

Restitution and Repayment

Circumstances and Context

Use of Fraudulent Methods

Sentencing Guidelines

Mitigating and Aggravating Factors

We Are Here for You

More Commonly Asked Tax Audit Questions

Questions and Answers for Criminal Tax Representation

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