Restaurant Owner Indicted with Violating Federal Tax Laws
A federal grand jury in Milwaukee returned a 33-count indictment charging Paul Bouraxis and three members of his family with violating federal tax laws.
The indictment charges Paul Bouraxis (age 65), his wife Freida Bouraxis (age 60), their son, Andreas Bouraxis (age 38), and son-in-law, Reiad “Ray” Awadallah (age 44), all of whom reside in Franklin, Wisconsin, with conspiring to impede the Internal Revenue Service based on their skimming of cash from the receipts of three restaurants they operated: the Omega Burger restaurant, located on S. 27th Street in Franklin, the El Fuego restaurant located on W. Layton Avenue in Milwaukee, and the El Beso restaurant located on S. 74th Street, in Greenfield.
The indictment also alleges that the defendants paid restaurant employees in cash and failed to withhold or pay taxes on such wages. According to the indictment, the defendants concealed their actions by not depositing cash skimmed from the restaurants to bank accounts and, instead maintained a cash hoard of more than $1.7 million. Some of the skimmed cash was used to purchase jewelry and precious metals, including 33, 100-ounce bars of silver.
The indictment also charges Paul Bouraxis with 10 counts of tax evasion based on the tax return he filed for himself for 2010 and payroll tax returns he filed for Omega Burger. Andreas Bouraxis is also charge with 18 counts of tax evasion based on the tax return he filed for himself for 2010 and payroll tax returns he filed for El Fuego and El Beso. Awadallah is also charged with three counts of filing false tax returns based on the tax returns he filed for himself for the years 2009—2011.
Paul Bouraxis is also charged with bank fraud in connection with loans he obtained from Associated Bank. The indictment alleges that Paul Bouraxis defaulted on the loans and then re-negotiated the terms of the loans by concealing his true financial condition from the bank, including that he and his family had a cash hoard of more than $1.7 million and bank accounts in Greece with balances of more than $2 million. According to the indictment, Associated Bank lost more than $4 million as a result of this scheme.
Based on these charges, Paul Bouraxis faces up to 85 years in prison and fines of up to $3.75 million. Freida Bouraxis faces up to five years in prison and a fine of up to $250,000. Andreas Bouraxis faces up to 19 years in prison and fines of up to $4.75 million. Reiad Awadallah faces up to 14 years in prison and fines of up to $1 million. The indictment also seeks to forfeit more than $1.7 million in currency and gold and silver coins and bars previously seized by federal agents.
Separately, a two-count indictment was returned against Gus Koutromanos (age 68) of New Berlin charging him with two counts of tax evasion. The indictment alleges that during 2012, Koutromanos, who was the part-owner of a restaurant known as Omega on Twenty Seven, located on S. 27th Street in Milwaukee, paid restaurant employees more than $385,000 in cash, from which he did not withhold income or payroll taxes. Koutromanos faces up to 10 years in prison and fines of up to $500,000 if convicted
In addition, the government filed a plea agreement that had been reached with Scott Sherman (age 45), an accountant residing in Sheboygan. Under the terms of this plea agreement, Sherman will plead guilty to one count of filing a false federal income tax return. Sherman, who provided accounting and bookkeeping services to Paul Bouraxis and his businesses, failed to report all of the income he earned from his accounting practice during the years 2007-2011. As a result, Sherman underpaid his income taxes by more than $48,000.
Sherman faces up to three years in prison and a fine of up to $250,000. Sherman has agreed to make full restitution to the IRS for the unpaid taxes, penalties and interest, which is presently estimated to be approximately $93,000. As part of his plea agreement, Sherman has also agreed to cooperate with the government in its investigation and prosecution of this and related matters.
These matters were investigated by Special Agents from the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. The prosecution is assigned to Assistant United States Attorneys Matthew Jacobs and Richard Frohling.
“This indictment should serve as a warning to those who choose to actively engage in illegal schemes to evade their income and payroll tax obligations,“ said Shea Jones, Special Agent in Charge of IRS Criminal Investigation’s St. Paul Field Office. “Using cash in an attempt to conceal illegal activity will not deter IRS Criminal Investigation’s Special Agents from vigorously pursuing those who threaten the integrity of our nation’s tax system.”