Federal prosecutors said the owners of three Central New York donut businesses were found guilty on Wednesday of failing to disclose more than $2.8 million in cash sales to the Internal Revenue Service.
The Zourdos family owns and operates Dippin Donuts, with two locations in Rome and one in New Hartford.
What Is the Irs?
The Internal Revenue Service (IRS) is the federal government’s revenue service in charge of collecting taxes and enforcing the Internal Revenue Code, which is the major body of federal statutory tax legislation.
It is part of the Treasury Department and is overseen by the Commissioner of Internal Revenue, who is appointed by the President of the United States for a five-year term.
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The IRS’s responsibilities include assisting taxpayers with their taxes, pursuing and resolving cases of erroneous or fraudulent tax files, and overseeing numerous benefit programs, including the Affordable Care Act.
The IRS has been in charge of collecting the majority of the income needed to sustain the federal government since its inception, despite occasional debate and disagreement over its tactics, constitutionality, and the overall premise of taxation.
Crimes of the Guilty
According to a news release from the United States Attorney’s Office for the Northern District of New York, Rome residents John Zourdos, his wife Helen Zourdos.
Their son Dimitrios Zourdos was found guilty by a federal trial jury in Utica of conspiring to defraud the United States and tax evasion. According to federal prosecutors, the Zourdos family owns and manages Dippin Donuts, which has two stores in Rome and one in New Hartford.
According to federal prosecutors, the proprietors were accused of concealing more than $2.8 million in cash sales from the IRS between 2013 and 2017, as well as dodging more than $650,000 in individual taxes.
The jury was selected Monday morning ahead of opening arguments. The investigation into the Zourdos family started in 2018. The federal indictment alleged that the three hid $1 million in cash sales by depositing money into personal accounts instead of business accounts for more than four years.
False Reportings, Unreported Cash, and All “of the Book” Payments
The federal prosecutors, while informing the media, told that the family put funds from the stores into personal bank accounts rather than business bank accounts. Moreover, they provided inaccurate information to their accountant and led their accountant to submit false individual and corporate tax forms with the IRS.
According to federal authorities, the proprietors utilized undisclosed cash sales to fund an extravagant lifestyle, which included the acquisition of many luxury vehicles. Prosecutors said they also paid certain employees “off the books” cash wages for overtime hours and paid other employees “off the books” cash wages for all hours worked.
Each of the three proprietors was found guilty of one count of conspiracy to defraud the US, seven counts of tax evasion, and seven counts of aiding and abetting the filing of fraudulent corporate tax returns.
Sentence and Fines
Federal prosecutors claimed that all three owners will be sentenced at a later date. Prosecutors said they risk a maximum penalty of five years in jail for each crime of conspiracy and tax evasion, as well as three years in prison for each count of helping in the filing of fake tax forms.
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They might also face fines of up to $250,000, or double their monetary gain. The family may also have to face a three-year supervised release sentence.
The Zourdos family was unable to declare its money and assets to the IRS and thus would have to face severe criminal charges. The former years of luxury and glory are thus, over.
