Brothers Plead Guilty to $6.1 Million Tax Fraud
PEORIA, IL—Two brothers, who formerly owned and operated a Fast Stop service station in Peoria, Ill., entered pleas of guilty today to conspiracy to defraud, as announced by U.S. Attorney Jim Lewis, Central District of Illinois. Sentencing is scheduled on April 27, 2015, for Shaher M. Mizyed, 50, of Naperville, Ill., and Mohammad M. Mizyed, 46, of the 2800 block of West Playden, Peoria, Ill.
At the time of the offenses, Shaher and Mohammad Mizyed had ownership interest and were involved in the management of Tira Oil LLC, which operated the Fast Stop gas station and convenience store located at 3606 N. Prospect Road in Peoria. Both men were active in the daily operations and record keeping of Tira Oil which did a large amount of cash business.
During today’s hearing, before U.S. District Judge Michael M. Mihm, and according to court documents, both men admitted that from 2006 through 2010, they conspired to file false federal corporate income tax returns. Based on information provided by the brothers to their accountant, the false tax returns under-reported the gross receipts of their company in the amount of approximately $6.1 million, which the brothers split between them. As a result of its failure to report the additional gross receipts to the IRS, Tira Oil owes approximately $171,000 in corporate income taxes.
Shaher Mizyed admitted that from January 2006 to about January 2012, false information was provided in the company’s monthly Illinois State Sales and Use Tax Returns. The false returns under-reported approximately $4.3 million in sales and defrauded the state of approximately $347,000 in state tax revenues.
Mohammad Mizyed entered a plea of guilty to conspiracy to commit mail fraud. He admitted that false income information was provided to the state of Illinois to receive approximately $163,000 in state medical benefits. Shaher Mizyed also provided false information about his income to obtain food stamp benefits totaling approximately $36,000. The same year that Shaher purchased a home for $581,000, he falsely claimed a gross monthly income of $800.00 in his application for food stamps
Shaher Mizyed further admitted that when he refinanced his home, he provided the bank with a 2007 tax return that was different from what was filed with the IRS. The return provided to the bank, in support of an application to refinance his home mortgage, showed a gross income of $95,056, when the return filed with the IRS falsely reflected a deficit of nearly $80,000.
Mohammad Mizyed also pled guilty to one count of mail fraud for providing false 2007 and 2008 tax returns to the bank in support of his request for a mortgage. The tax returns Mohammad provided to the bank reflected income of $70,956 in 2007 and $79,109 in 2008; however, returns filed with the IRS reflected income of $3,900 in 2007 and $13,000 in 2008. Prior to the bank’s approval of the loan, he bank learned of the false information and denied the loan to Mohammad.
The maximum statutory penalty for conspiracy to defraud the United States and to violate tax laws is up to five years in prison; for mail fraud and for conspiracy to commit mail fraud the penalty is up to 20 years in prison. The offenses carry fines of up to $250,000.
The case is being prosecuted by Supervisory Assistant U.S. Attorney Darilynn J. Knauss and Special Assistant U.S. Attorney Eugene Bian of the Office of the Illinois Attorney General. The charges are the result of investigation by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the Illinois Department of Revenue.