HAPPY'S PIZZA FRANCHISE OWNER INDICTED IN CONSPIRACY TO UNDERREPORT INCOME AND PAYROLL TAXES

FROM:  U.S. DEPARTMENT OF JUSTICE 
Tuesday, July 16, 2013
Pizza Franchise Owner and Four Others Indicted for Tax Fraud

The Justice Department announced today that Happy Asker, franchise owner of multiple “Happy’s Pizza” franchises, was indicted by a federal grand jury in Detroit along with Maher Bashi, Tom Yaldo, Arkan Summa and Tagrid Bashi for multiple tax offenses arising from a conspiracy to under report taxable income and payroll taxes of nine Happy’s Pizza franchises.  All defendants with the exception of Happy Asker were arrested.
                     
A multiple count indictment was unsealed in the Eastern District of Michigan charging Happy Asker, Maher Bashi and Tom Yaldo with conspiracy to defraud the United States by keeping fraudulent accounting records and falsely reporting income taxes and payroll taxes due and owing.

The indictment alleges that from approximately June 2004 through April 2011, the defendants conspired with each other to divert business receipts, underreport wages and understate the true income and expenses of specified Happy’s Pizza franchises. According to the indictment, the scheme resulted in the specified franchises paying more than $2.1 million in unreported wages to employees and shareholders .

Additional charges in the indictment include three counts of filing a false individual income tax return as to Happy Asker; 21 counts of aiding in the filing of false payroll tax returns as to Happy Asker and Maher Bashi; 23 counts of aiding in the filing of false payroll tax returns as to Tom Yaldo on behalf of specified Happy’s Pizza franchises; and 11 counts as to Happy Asker and Maher Bashi for aiding in filing false corporate tax returns on behalf of specified Happy’s Pizza franchises.

Finally, the indictment also charges Happy Asker and Maher Bashi with one count of obstructing the due administration of the internal revenue laws.  Arkan Summa and Tagrid Bashi are also charged together in a count of obstructing the due administration of the internal revenue laws and Tom Yaldo is also charged with one count of obstructing the due administration of the internal revenue laws.

An indictment is not a finding of guilt.  Individuals charged in indictments are presumed innocent until proven guilty.  If convicted of the conspiracy charge, the defendants face up to 5 years in prison and a $250,000 fine.  The charges of filing a false income tax return and aiding or assisting in filing a false return carry a maximum penalty of three years in prison and a fine of $250,000 for each count.  The obstruction charge carries a maximum penalty of three years in prison and a fine of $250,000 for each count.

This case was investigated by Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration and the FBI and is being prosecuted by Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Justice Department’s Tax Division.

LABOR SECRETARY ON UNEMPLOYMENT BENEFITS AND THE PAYROLL TAX CUT

The following excerpt is from the U.S. Department of Labor website:

Statement by Labor Secretary Hilda L. Solis on extension of Unemployment Insurance benefits and the payroll tax cut

"WASHINGTON — Labor Secretary Hilda L. Solis has issued the following statement on congressional action today on the extension of Unemployment Insurance benefits and the payroll tax cut:

"I am pleased that congressional leaders have extended both unemployment insurance benefits for the long-term unemployed, and the payroll tax cut that is critical to so many working families.

"The payroll tax extension will put $1,000 back into the pockets of average working Americans over the next year. The unemployment insurance extension will continue to provide a lifeline to the 40 percent of unemployed Americans who have been out of work for long periods of time and who may no longer qualify for state unemployment insurance. The extension will also prevent 4.4 million individuals from exhausting their benefits, and will help another 8.1 million living in households with the long-term unemployed, including 3.1 million children.

"The extension also introduces innovative measures that were included in the American Jobs Act, which provide flexibility in the use of unemployment benefits to help the unemployed get back to work. Today's bill includes additional funds for re-employment services and funds to avert future layoffs. Moreover, the extension provides flexibility for the unemployed to get training, short-term employment or set up their own businesses.

"Today's action by the Congress is a win — not only for people, but also for our economy as a whole."

$15 MILLION IN SOCIAL SECUITRITY AND MEDICARE TAXES POCKETED BY EMPLOYER

BUSINESSMAN CONVICTED FOR FAILING TO PAY OVER $15 MILLION IN PAYROL TAXES

The following excerpt is from the Department of Justice website:

December 21, 2011
“WASHINGTON - Bruce Gregory Harrison III was convicted yesterday following a jury trial in federal court in Winston-Salem, N.C., announced the Department of Justice.   Harrison had been charged in a 63-count indictment with large-scale payroll tax fraud and failure to file individual income tax returns.   The evidence at trial proved that Harrison failed to pay over more than $15 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.

“Mr. Harrison not only defrauded his own employees, but he defrauded the American people as well,” said Ripley Rand, U.S. Attorney for the Middle District of North Carolina. “This sort of conduct is intolerable, especially during these difficult economic times, and we will do everything we can to make sure it is punished accordingly.”

“Honest, hard-working taxpayers count on their payroll deductions for Social Security and Medicare being paid over to fund their retirement and health care needs,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division.  “They should rest assured that those who would steal those funds will be prosecuted to the fullest extent of the law.”

“The IRS-Criminal Investigation Division takes these violations of law very seriously.   Payroll tax fraud results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” said Victor S.O. Song, Chief of the Internal Revenue Service (IRS) – Criminal Investigation.

According to the trial evidence and other documents filed in the case, Harrison, a resident of Greensboro, N.C., did business under various corporate names including U.S.A. Staffing and Compensation Management Inc.   He owned or controlled temporary staffing companies operating in at least nine states.   Harrison’s staffing companies were headquartered in Guilford County, N.C., and contracted with client businesses to provide temporary workers.   Harrison’s companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees.   Instead, Harrison failed to account for and pay over in excess of $15 million in federal payroll taxes for the employees of those companies.   The evidence at trial showed that Harrison caused false bank statements to be presented to auditors to conceal the nonpayment of the payroll taxes.

Harrison was also convicted of corruptly endeavoring to obstruct the IRS by means of false statements to IRS revenue officers.   Evidence established he had used company funds to purchase personal residences, to buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants.   Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006.   Following the jury verdict, Chief Judge James A. Beaty Jr. ordered Harrison detained.   Sentencing is scheduled for April 6, 2012, at 9:30 a.m. in Winston-Salem.

U.S. Attorney Rand and Principal Deputy Assistant Attorney General DiCicco commended Assistant U.S. Attorneys Frank Chut and Terri-Lei O’Malley and Tax Division Trial Attorney Jeffrey McLellan, and the IRS Agents who assisted them, in successfully prosecuting the case.”