Indictment Charges Brothers, Former Operators of Peoria Service Station, with $6.1 Million Tax Fraud
PEORIA, IL—A federal grand jury today charged two brothers who formerly owned and operated a Fast Stop service station in Peoria, Ill., with conspiracy to commit tax fraud and mail fraud, as announced by U.S. Attorney Jim Lewis, Central District of Illinois. Shaher M. Mizyed, 50, of Naperville, Ill., and Mohammad M. Mizyed, 46, of the 2800 block of West Playden, Peoria, Ill., are both charged with conspiracy to commit tax fraud resulting from failure to report to the IRS approximately $6.1 million in gross receipts received and conspiracy to commit mail fraud related to approximately $200,000 in medical and other benefits fraudulently obtained from the state of Illinois.
According to the indictment, at various times during the alleged conspiracy, from 2006 to 2011, one or the other of the brothers was identified as the owner of Tira Oil LLC, which operated the Fast Stop gas station and convenience store located at 3606 N. Prospect Road in Peoria. The indictment alleges that on a daily basis one of the brothers opened the business, and reviewed and recorded the previous day’s sales receipts. To divert corporate receipts to their own use, the indictment alleges that not all the cash generated from the business’s operation was deposited into Tira Oil’s bank account. The two allegedly split the remaining cash for personal use as well as to pay some business expenses. Further, to conceal the scheme, false information was reported to the accountant who prepared the tax returns for Tira Oil. The indictment alleges that Tira Oil owes approximately $171,000 in corporate income taxes resulting from failure to report the additional gross receipts to the IRS.
The men are charged with conspiracy to commit mail fraud related to allegations that from 2003 to December 2013, members of the conspiracy concealed income and provided false information to the Illinois Department of Human Services to obtain approximately $200,000 in medical and other benefits. To further the conspiracy, false information and forms were submitted to DHS that reported hours worked and hourly wages for Shaher and Mohammad in amounts ranging from $225.00 per week, $400.00—450.00 every two weeks, and gross monthly income of $800.00.
Shaher is charged with four counts of mail fraud related to submission of Illinois Sales and Use Tax Returns to the state of Illinois that allegedly substantially under-reported the amount of gas and other goods sold at Tira Oil. According to the indictment, in April 2010, during an investigation by the Illinois Department of Revenue, revenue agents served Shaher with a formal demand for production of books and records; despite the formal demand, Shaher did not produce all the books and records as required.
In February 2011, Shaher allegedly represented to Illinois Department of Revenue agents that sales records of Tira Oil had been destroyed in a fire at his home, when, in fact, the sales receipts were found at the Fast Stop gas station during execution of a search warrant on Feb. 28, 2012. As a result of Shaher’s alleged failure to report approximately $4.3 million in sales of gas and other goods by Tira Oil, the state of Illinois was defrauded of approximately $347,000 in state tax revenues.
Shaher Mizyed is charged with one count of bank fraud for allegedly providing a false 2007 tax return to the bank in March 2009, in support of an application to refinance his home mortgage in the amount of approximately $328,500. In fact, the indictment alleges the tax return provided to the bank was not the the tax return Shaher had filed with the IRS.
Mohammad Mizyed is also charged with bank fraud for allegedly providing false 2007 and 2008 tax returns to the bank in support of his request for a mortgage of approximately $319,000 to purchase his home in October 2009. The tax returns Mohammad provided to the bank were allegedly not the returns he had filed with the IRS.
In addition to the two conspiracy charges, Shaher is charged with three counts of filing false corporate tax returns; two counts of filing false amended corporate tax returns; four counts of mail fraud; and, one count of bank fraud. Mohammad is also charged with two counts of filing false personal tax returns and one count of bank fraud, in addition to the two conspiracy charges.
If convicted, the maximum statutory penalty for conspiracy to defraud the United States and to violate tax laws is up to five years in prison; for filing false or amended corporate or personal tax returns, the penalty is up to three years in prison; for bank fraud the penalty is up to 30 years in prison; up to five years in prison for conspiracy to commit mail fraud, and for each count of mail fraud, the statutory penalty is up to 20 years in prison.
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.
The defendants will be given a notice to appear in federal court on a date to be determined by the U.S. Clerk of the Court.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.