Prosecutors in Marion County have revealed the results of a three-year long investigation into the owners of a chain of Teppanyaki restaurants in central Indiana. The owners are suspected of underreporting cash sales and, thereby, avoiding sales taxes. Investigators in the Marion County's office did not reveal many details of their investigation, but they pointed to their recently increased efforts to crack down on white collar crime.
Search warrants were served on the restaurants about eighteen months ago, but prosecutors refused to disclose the nature of their investigation until charges were filed. Prosecutors allege that the restaurant owners skimmed cash from their sales to reduce the amount of sales that were reported to state revenue officials. The underreporting of income reduced the amount of revenue that was subject to the state's sales tax.
The suspects have been charged with a variety of crimes, including corrupt business influence, theft, and failure to remit taxes held in trust. According to investigators, the owners reported only 5% of their total sales as having been made in cash, whereas the total percentage, according to investigators is 46%. The total amount of underreported cash income for the restaurants is $8,043,633, and the tax that is believed to be owed is $675,000. None of the defendants has responded to the charges.
Businesses often fall behind in their reporting of revenue and in paying sales tax and payroll tax. If the shortfalls are not willful, criminal charges are not likely to stick. If, however, the prosecutors can establish that the failure to properly account for revenue and payment of sales tax was intentional, criminal charges may be levied. The advice of a competent criminal defense attorney can be very useful in defending against such charges and avoiding criminal penalties.
Source: IndyStar, "Prosecutor: Owners of Central Indiana Teppanyaki chain underreported $8M in sales," Holly V. Hays, May 3, 2018