Top 5 Sales Tax Crimes

[00:00:06] Speaker A: Hi, and welcome to taxing poetic, brought to you by Synexus tax Solutions. I'm your host, Jenny Carter. [00:00:12] Speaker B: And I'm your co host today, Tim Howe. [00:00:14] Speaker A: Today, what we're talking about is the one with the sales tax crimes. We are going to discuss what I believe are the top five sales tax crimes since the of sales tax crime. [00:00:26] Speaker B: I absolutely love it. It looks like our producer, JB is sitting over here with bated breath. [00:00:31] Speaker A: Yes, and I did not introduce JB. JB, how you doing? You are the Holmes to my sherlock. [00:00:34] Speaker C: Oh, good. Thank you. Yes, I'm sure you are in the demographic that loves the real murders. [00:00:40] Speaker A: Oh, I am a middle aged american woman, so, yes, we will talk more about that in a little bit here. But since we're switching things up today and I'm doing the intro, I'm going to kick it to Tim for a haiku. [00:00:51] Speaker B: I actually have a AI generated crime. Haiku. [00:00:56] Speaker A: AI generated. You got to use your real brain, but. [00:00:59] Speaker B: Okay, man, I can't do the whole. What is it? 335-35-3575 I don't even know the numerics, and I don't even know how this works. But anyways, here we go. Let's give this a shot. You ready? [00:01:08] Speaker A: I'm ready. [00:01:09] Speaker B: Cat burglar on prowl stealing tuna cans with glee. Clause of justice strike. [00:01:18] Speaker C: That's a literal cat. That's about cats stealing things. [00:01:23] Speaker A: You know, I'm a cat lady also. I love that. [00:01:26] Speaker C: Good. Jenny, do you have a haiku, too? [00:01:29] Speaker A: I do have a haiku. All right, you ready? [00:01:31] Speaker B: All right, let me get you. Drop the pipe and pick up the magnifying glass. [00:01:36] Speaker A: I got to pick up my magnifying glass here to read this. Okay, you ready? [00:01:40] Speaker B: Yes. [00:01:41] Speaker A: I can solve true crimes from the comfort of my couch while eating froot loops. And that's a true story, because, again, I'm in the demographic of middle aged american women who are obsessed with true crime. I watch everything there is out there. And when they rebooted unsolved mysteries on Netflix, I watched every episode and was like, how are these unsolved? I know what happened in all of these. [00:02:07] Speaker B: Look, the fact that the oxygen network is literally 100% dedicated to true crime stuff now, it just completely blows my mind. [00:02:16] Speaker A: It is my demographic. [00:02:17] Speaker C: Give the people what they want. That's the first rule of journalism. [00:02:20] Speaker B: There you go. [00:02:20] Speaker A: And let's travel back in time for a moment when JB came to us and Synexus marketing came to us and said, hey, Tim and Jenny, we would like for you to do a podcast for Synexus. When I asked you, can it be about true crime, what did you say? [00:02:35] Speaker B: No. [00:02:36] Speaker A: And then I asked, can it be about celebrities? And you said, no. So I had to figure out a way to work it in somehow to get my true passions. [00:02:45] Speaker B: And that's fine. You've done research on the top five sales tax crimes. And for everybody who is absolutely tired of hearing me talk, congratulations. This is Jenny's episode. She's been keyed up for this months. [00:02:58] Speaker A: I love listening to myself talk much more. [00:03:00] Speaker B: And for all y'all who are actually listening and not watching, Jenny is dressed in full Sherlock Holmes regalia, has a pipe, and even a magnifying. [00:03:10] Speaker A: Yeah, this is really my true calling. [00:03:12] Speaker B: She's on it. [00:03:13] Speaker C: I never really understood the magnifying glass. You're just like, I'm looking at this, but I just want to look at it bigger. I mean, that's 3% bigger. [00:03:21] Speaker A: JB, obviously, I need to explain this to you. Back in the day of Sherlock Holmes, this is how you would look at the only forensic evidence they had. [00:03:29] Speaker C: I know, but what is he mapping it out with a different. Like, how does it help you? It's just like, here's a fingerprint. A little bit bigger. [00:03:35] Speaker A: It's just like, he can look at the fingerprint bigger. [00:03:37] Speaker C: The chalk outline of the body. How did that help you? This is where the guy died. It's like, ooh, gross. [00:03:43] Speaker A: Exactly. [00:03:44] Speaker C: Now get back to my hunch. You know what I mean? There's no crime solving. [00:03:48] Speaker A: I will have a whole offline camp for you. We will do a boot camp on true crime, Jamie. So, yes, we will discuss all the tools. [00:03:57] Speaker C: Okay? [00:03:57] Speaker A: Yes. So you guys ready for my top five? [00:04:00] Speaker B: I'm ready for you to roll into your top five stories. Let's do this. I cannot wait. [00:04:03] Speaker A: And I can't really specify why I ranked them this way. I know why I ranked number one the way I did. It's really more of a feeling, maybe egregiousness. So, you know, just roll with it. [00:04:13] Speaker C: And we do not know the order, Tim and I, so we're going to ask you a couple of questions. [00:04:17] Speaker B: I have a couple of ideas of what the cases are, but I really don't know the order, so I cannot wait to hear this. So fire away, kid. Let's see what you got. [00:04:24] Speaker A: All right, this is number five. Three Casa Don Juan restaurants in Las Vegas, Nevada, were charged with underreporting cash sales by up to $5.1 million and falsifying Nevada sales tax returns. For years between 2014 and 2018. [00:04:43] Speaker B: That's a lot of cheese enchiladas, dude. [00:04:45] Speaker C: Yeah. I mean, mexican food, typically not very expensive in sales tax. Yeah. [00:04:53] Speaker B: So where was it? [00:04:54] Speaker A: It's in Vegas. So, I mean, it is more expensive out there. [00:04:56] Speaker C: But what is the sales tax for food? [00:04:58] Speaker A: What is the sales tax for food on Vegas? [00:05:01] Speaker C: 6.85. [00:05:02] Speaker B: 6.85%. There you go. There you go. [00:05:05] Speaker A: Substantial. So this was discovered during a 2018 state audit. We talked about this, I believe, in one of our previous episodes where we always kind of make fun of auditors, but we make fun of auditors in jest, and we do love them because the reason why they have their job to ensure that everything's being reported accurately. Correct. [00:05:24] Speaker B: That's exactly right. [00:05:25] Speaker A: Yeah. [00:05:25] Speaker B: So they're not stuff in their pockets, because, FYI, 5.1 million was a result of $75 million in underreported sales. [00:05:35] Speaker C: What sales are you doing in a year in that? You could also underreport. Are they selling $500 million worth of tacos and then just a small percentage of them, or is that 100%? [00:05:46] Speaker B: I mean, dude, if you think about a typical restaurant, especially if you're talking in a sit in restaurant. And how many of these were there? Three. [00:05:52] Speaker A: Three. [00:05:53] Speaker B: So that's like 25 million a pop over four years. So that's 6 million per year. Doing quick AI math, dude, that's ridiculous. [00:06:02] Speaker C: Because, I mean, anybody who does a crime thinks they can get away with it. [00:06:05] Speaker A: Right? [00:06:06] Speaker C: So why do you think that they thought they could get away with this? [00:06:10] Speaker A: Well, they went through a lot of trouble, from what I understood in my research. I mean, to falsify their sales records. Did they really sell records? Yes. And daily cash and sales reports were falsified. And eventually, I assume, they were able to tie it back to cash deposits. [00:06:28] Speaker B: I am absolutely intrigued by this case. [00:06:30] Speaker A: Yes. It's amazing. And here we go. We've discussed this before in previous episodes. Sometimes it's just negligence. People just don't understand what they're supposed to do. We've seen this a thousand times. Right, Tim? I mean, people just don't understand the laws. They didn't know they were supposed to register. In this particular case, it is egregious because they literally used the money to support their lavish lifestyles and to pay for real estate investments. [00:06:57] Speaker B: Yeah. And furthering this, which makes this even more interesting, so the total tax loss was actually to the IRS to the tune of 1.6 million. But because of the falsification of the point of sale records and everything else, it's what drove their sales tax inaccuracy. So these people were basically defrauding the federal government and the state government at the same exact time. [00:07:18] Speaker A: Right. [00:07:19] Speaker B: Wow. [00:07:20] Speaker C: How do you get caught doing that? [00:07:22] Speaker B: It's easy, in all honesty. Look, all it takes is an auditor to sit down and look at your sales reports for five. It's a typical audit for a restaurant, right? So auditor comes in, says, hey, give me your general ledger. Let me look at your daily cash receipts for x days. And they may do a statistical sample, and then they check it and see how it matches up to what you actually remitted on the return. Right. So for your return report or return support. Excuse me. So they start finding disconnects there. Flags start going off, but at the end of the day, there's a toleration, like a tolerable percentage of error. That had to be way outside of it. [00:08:01] Speaker A: Way outside. And we talked about in our previous food and beverage episodes with Donna, the links these auditors will go to. As far as actually visiting the restaurant, sitting down, seeing if there's a water pitcher on the table. So you better believe if they think there's anything going on, anything sneaky, they're going to be in there maybe daily asking for their see, and they may. [00:08:20] Speaker C: Have just gone in, just seen how many people are paying in cash, and it was like 19 out of 20. And they're like, okay. They're reporting. I can feel it. [00:08:27] Speaker B: There you go. [00:08:28] Speaker A: I mean, millions of dollars, that's worth your time, right? Not just the. [00:08:31] Speaker B: Put that in your pipe there, Sherlock, and smoke it. [00:08:34] Speaker A: I can't. 5.1 million won't fit in here. [00:08:37] Speaker C: Tim, are you ranking this one? Don't try it at home. [00:08:41] Speaker B: 110%. This would be a big negative. [00:08:44] Speaker A: Is this why you were just released from jail? [00:08:46] Speaker B: No, we won't go into that. [00:08:47] Speaker A: Okay. [00:08:47] Speaker B: We'll talk that it's not boy cut. [00:08:52] Speaker A: Cat. Yeah, cat burglar. [00:08:54] Speaker B: Exactly. [00:08:55] Speaker A: All right. And number four, our number four sales tax crime, the Brooklyn puppy seller ordered to pay more than $2.1 million in sales tax fraud case. [00:09:07] Speaker C: Is it a puppy mill? [00:09:08] Speaker A: Well, that's what I was worried about. Was. Is this one of those terrible places? I know we're all fans of animals here, so I almost didn't even want to give this airtime, but it turns out I think it's just pet stores. [00:09:20] Speaker B: Guess what? The fact is they involve puppies. These people have a special first class ticket in hell. [00:09:26] Speaker C: Puppies? [00:09:27] Speaker A: Yeah. [00:09:28] Speaker B: Nah, dude. [00:09:28] Speaker A: No. [00:09:29] Speaker B: Especially when you're boosting sales tax dollars. At the same time. [00:09:32] Speaker A: Come on. Yeah. [00:09:33] Speaker B: So what's the deeds? [00:09:34] Speaker A: Well, the deeds are. So in this case, the Brooklyn, New York based puppy petite Incorporated and quality canines incorporated not only failed to file sales tax returns for all periods between, let's see, December 2013 and 2019, did not remit most of their sales tax returns. [00:09:56] Speaker B: They collected. [00:09:56] Speaker A: They were collecting it. [00:09:57] Speaker B: Oh, that's awesome. [00:09:59] Speaker A: Not filing returns and failed to file more than $800,000 in sales tax. [00:10:05] Speaker B: Just to let you know out there, if you collect tax from someone and you don't remit it. Yeah. There's an orange jumpsuit with your name on it that says, doc. [00:10:13] Speaker C: That seems to be. That's the most you can do, like, corrections. Then you don't pay it. Not even, like, I'm not skipping it. I'm taking it. [00:10:21] Speaker B: I'm taking it. Yeah. [00:10:22] Speaker A: And, Tim, text poetic for a minute. This is kind of some sales tax 101 of how sales tax is a fiduciary tax, which means the seller is really just holding the tax for the state. The tax belongs to the state. [00:10:34] Speaker B: Holy trip. Award score, Batman. Fiduciary. Look at Jenny. She put that Sherlock Holmes hat on her. She's flying today, folks. No, in all honesty, it's a trust. You know, the state's entrusting you as an agent of the state. It's kind of what you do, right? We say you take a pseudo oath when you actually fill your registration, that you're going to be a faithful agent and collect the tax on behalf of the state and remit it. And so when you decide not to do that, guess what you've done? You've defrauded the state. You've collected the money, and you stuffed it in your pockets. You are now a felon. [00:11:05] Speaker A: And they do not like that because the tax does not belong to you. And, Tim, we have seen this with clients and other companies we've talked to that have cash flow problems. That's right. [00:11:14] Speaker B: They've asked. In some cases, they've said, hey, is there a way that we can do this? Whatever. And you're like, look, you cannot do that. It is 100% illegal. There's nothing you can do about that. [00:11:25] Speaker A: Absolutely. So the principals of the company are on the hook. If you're going to do this, you're going to jail, as we're going to see 110%. [00:11:33] Speaker C: I really like the Dr. Suseri of it all. The way it started like, the puppy petites and the quality canines failed to file. And I was like, man, there's a lot of alliteration happening here. [00:11:42] Speaker B: Exactly. [00:11:43] Speaker C: Really like it. One fish, two fish, red fish, blue fish, 100%. [00:11:47] Speaker A: Which is why it's number four on the list, alliteration. So, yes. Also, when they did file their returns intermittently during this period, they were grossly underreported sales tax. They purposely, again, not negligent, which can happen. Not that it's an excuse, but they purposely underreported sales. So they were ordered to pay $2.1 million in restitution to the state. I don't think there was any jail time associated with this, but $2.1 million. I don't know if one of you can AI the sales tax on puppies in New York. [00:12:19] Speaker B: I have no idea. But that's a lot of puppies. [00:12:21] Speaker A: That's a lot of puppies, right? [00:12:22] Speaker C: I mean, it's got to be a lot. What do you think the threshold is for sales tax? What's the number that makes you, like, you're going to jail? Like 2.1 million wasn't enough. [00:12:31] Speaker A: Well, we'll see. [00:12:32] Speaker B: You know what, man? In all honesty, I think it truly depends on the circumstance. I think if you were negligent and you were really sorry about it and you screwed up. Right. I don't know. I think a lot of it depends on the appearance of the case and what you were actually doing in a situation like this. I'm absolutely shocked that these people did not spend time in jail. [00:12:56] Speaker A: Well, they might have. I couldn't find any substantiation for that, but I think so. [00:13:00] Speaker B: Yes, you would think so. Or an awful lot of community service. Picking up dog poop. [00:13:08] Speaker A: I like that punishment. [00:13:10] Speaker B: Come to my house. [00:13:12] Speaker A: There's plenty of it. So to close this case out, I have a quote from the acting New York state tax commissioner, and she said, business owners who steal sales tax paid by their customers deprive their communities of revenue for vital public programs and services and put law abiding businesses at a competitive disadvantage, which. Amen. Isn't that what we're all about here? [00:13:35] Speaker B: And it's so funny that we consistently have this conversation, sometimes with people who are not complying with Wayfair. Right. So you talk into other remote sellers, and you have people who come to us and say, hey, look, I want to be compliant. I actually want to register and collect and remit this sales tax. But my competitor, who's two sites over, are selling the same exact product that I am, and they're not collecting any sales tax. And people know this and they just go to them, and it's an automatic competitive advantage for them. And I just say, do you want to be the guy? Do you want to be that guy that charges up the hill and doesn't collect the sales tax and takes all the arrows and ultimately gets your business shut down because you can't afford the liabilities or you just want to do it and provide maybe better customer service or a better product or something along those. It is. But it's sad that people use that as a competitive advantage. [00:14:20] Speaker A: It is sad. And really, I think it's the main reason, obviously, why Wayfair even happened. Because of Amazon and all the online e tailers that weren't charging sales tax. [00:14:28] Speaker B: That's right. [00:14:28] Speaker A: They were already putting big box stores out of business anyway. [00:14:31] Speaker B: But here, did you just make up a term etailers? [00:14:33] Speaker C: I think she did, but I liked it. [00:14:35] Speaker B: Dude, I love that E. Taylor, I. [00:14:36] Speaker A: Don'T think I made that up. [00:14:37] Speaker C: I have read that mean, you know. [00:14:40] Speaker B: Maybe I've always referred to e commerce business. I like E. Taylor. I'm stealing. Better stolen. [00:14:45] Speaker C: I have a three year old. She says she calls things like she sees them. And so she calls like a kleenex a sneeze. [00:14:51] Speaker A: Next. [00:14:51] Speaker C: And you're right. That's what it should be called. That's better than what it is. [00:14:55] Speaker A: She needs to help us on the show. [00:14:56] Speaker B: Okay, that's two terms I'm stealing today. A sneeze next. [00:15:01] Speaker A: Well, E. Taylor, there you go. Tim. Broaden your. [00:15:03] Speaker B: Thanks. [00:15:04] Speaker A: Fiduciary. [00:15:05] Speaker B: That's another one for congratulations. [00:15:07] Speaker A: All right, number three, here we go on the top five sales tax crimes list. Suburban Detroit. Couple charged with filing false sales tax returns and possessing sales zapper. [00:15:21] Speaker C: What? [00:15:22] Speaker A: This is all new to me. Tim, have you heard of this? [00:15:24] Speaker B: I've heard of a zapper, but I'm going to go ahead and let you describe it. [00:15:27] Speaker A: Well, thank you. [00:15:27] Speaker B: They're pretty interesting. [00:15:28] Speaker A: No, I have never, when I was researching for this episode, never heard of a zapper. So here's the deal. There was a married couple who owned a restaurant in Detroit and they were charged with filing, obviously, false sales tax returns and for the possession of a zapper, which I didn't know is an automated sales suppression device. It's a software you can buy and I guess what, overlap it with your pos system. [00:15:52] Speaker B: That's exactly right. [00:15:53] Speaker A: And then it will. I mean, I assume it's illegal. Of course. [00:15:56] Speaker B: What it effectively does is it kind of masks and clouds your sales. So you can say, hey, maybe in this hour I had $500 in sales, but the zapper will turn around and go and correct everything inside the pos so that you could actually take in $500 in sales, but it would actually only record $200 in sales. So you would basically keep the delta and you'd never have to report income tax or sales tax or anything. [00:16:21] Speaker C: Is it easy to find out when somebody's using that? It feels. [00:16:24] Speaker A: That's a great question. And the reason why they got caught is someone tipped them off. Tipped off the Department of Treasury in Michigan that they were in possession of a zapper. So maybe a disgruntled employee or whatever told them they were using it. And so that's how the Department of Treasury knew to go in and audit, and that's how they found out. [00:16:43] Speaker B: In all honesty, it's really okay. Prior to maybe eight years ago, let's say eight or ten years ago, it would be really difficult for you to identify it. And the reason is, unless you were doing pure cash counts, because we did not have access or privy to. Actually it was longer than ten years ago. It was maybe like twelve years ago, but we did not have like 1099K information. So to do sales zapping, you got to think if you're zapping sales and you're swiping credit cards, you need the money from the credit card, so you're going to want to take the full amount. Right. But there was a point in time when credit card reporting companies, they'd only just issue you back and give you the money and blah, blah, blah, you'd kind of be done, right. It deposits money into your account, 2% or whatever. That's exactly it. They didn't care. But now federal government, with 1099K reporting, you're getting credit card companies reporting the information in and they're validating those sales and you're matching it to the sales that are actually being reported on income tax return, blah, blah, blah, blah. So at the end of the day, it's a lot easier to catch people with sales zappers. Now, dude, that is really bad. Software like that is big time fraud. [00:17:42] Speaker A: I know, and I never even knew that existed. We know of all sorts of different types of sales tax software and never knew zapper was a not. [00:17:50] Speaker B: And here's the thing, folks. It's not in particular, just like geared towards sales tax. It is truly a underreporting total sales. [00:17:57] Speaker A: Tax for a general. [00:17:58] Speaker B: That's exactly it. Yeah, for general taxes. But of course, sales tax gets hosed in the process. Right. [00:18:03] Speaker A: Well, so as a result of the Department of Treasury finding this out and then putting them under audit. The amount of tax they owed was actually quite small compared to our last two cases. They failed to report $165,000 in sales taxes. But again, I put this at number three because of the egregiousness of the zapper. [00:18:24] Speaker C: Yeah, the zapper. Even though it's a lower number zapper. That makes sense. [00:18:28] Speaker B: But see, you do Michigan's rate, which is what, Jenny? 6%. [00:18:31] Speaker A: 6%. [00:18:32] Speaker B: Right. And turn around and do 165. Divided by six. That's 2.7 million in sales. [00:18:38] Speaker C: Yeah. They should open a mexican restaurant because they are not getting nearly as much as the Don Juan brothers. [00:18:47] Speaker B: Jeez, that's a lot of margaritas, bro. You know what? I'm literally going to go do some digging on that case tonight. I'm really intrigued. [00:18:58] Speaker C: The math is number. Especially when you see, like, the puppies, 2.1 million. You see the zapper for, what was it? Five years, six years they were doing the zapper. It's only $165,000. So it's like how they say, $5.1 million. [00:19:13] Speaker A: JD, I should have moved out the casa, but I don't know the zapper. [00:19:17] Speaker C: Really. I see why you did it. But the egregious. [00:19:19] Speaker A: I hope you can sleep tonight. I mean, it sounds like you're traumatized. Okay. [00:19:23] Speaker C: So many tacos. [00:19:23] Speaker A: So many tacos. So this Detroit couple, though, is the last I saw. They're facing five years in prison. Because FYI, people, all of this is a felony. Everything above every sales tax crime we are discussing today, sales sex crime is a felony. [00:19:41] Speaker B: Anything you do with regards to frauding the government as a registered taxpayer is typically a felony. [00:19:49] Speaker C: And that's a lot. What Synexus does is compliance, much to JB's point. [00:19:52] Speaker B: I mean, that's what we're doing, is protecting our clients and ensuring compliance to prevent fraud or prevent any sort of legal action. [00:20:00] Speaker A: Absolutely. And we sometimes give advice to our clients and they don't want to take it. [00:20:04] Speaker B: That's right. [00:20:05] Speaker A: And that's horse the water. [00:20:08] Speaker C: You can't make them drink. [00:20:09] Speaker A: That is true. [00:20:10] Speaker B: That was statement. [00:20:12] Speaker A: Yes. I think he just made that up. Right? Like detailing. [00:20:15] Speaker C: No, I'm kidding. [00:20:19] Speaker A: Nobody gets my jokes around here. [00:20:20] Speaker B: Don't get JB started on cliches. We will have a cliche contest here for like, 3 hours for sure. [00:20:26] Speaker A: All right, we're moving at the list now. We're at number two. Kodak accountant charged with fraud. Yes, this is an infamous case. This is probably, if I had to guess, really the most famous sales tax or just most highest profile. [00:20:42] Speaker B: It's property tax. But yes, I mean, it's like property tax. [00:20:47] Speaker A: Property tax is involved. Is involved. [00:20:50] Speaker B: It involves multiple facets of taxation. And this is a very interesting case, Tim. [00:20:55] Speaker A: I thought this was my episode. [00:20:56] Speaker B: I'm sorry. Take it. Just destroying me already. [00:21:01] Speaker A: Okay, so this guy, I don't even know if I'm allowed to say his can. [00:21:05] Speaker B: Yeah, it's public record. I'll say it for you. Mark Camarada. [00:21:08] Speaker A: And you know him? [00:21:09] Speaker B: I don't know him personally, but I've met him at a conference. [00:21:12] Speaker A: I mean, that's like celebrity style right there. We're inserting some celebrity. [00:21:17] Speaker C: This was quite some time ago. This is what, early two thousand s. [00:21:20] Speaker B: Oh, yeah, it's fine. Long. [00:21:22] Speaker A: Okay. All right, cool. So this guy Mark worked. He was the director of salt tax at Eastman Kodak. And the level of egregiousness, accused of money laundering and mail fraud, costing the company more than $4 million. And let me tell you something. He inflated payments and invoices to Kodak vendors in exchange for part of the payment going to his own shell company. So he was basically, say, billing the vendor. If the vendor owed 10,000 in tax, he billed them for 20 and put the extra ten in his own account. [00:21:57] Speaker C: It's like how they got caught in the firm with Tom Cruise. [00:21:59] Speaker A: Yes. So up to $4 million. And then just as to what you were saying, Tim, about property tax, what I learned is he also conspired with other businesses or outsourced contractors. [00:22:12] Speaker B: That's exactly right. [00:22:13] Speaker A: Lower their property tax assessments. [00:22:15] Speaker B: That's right. [00:22:15] Speaker A: I don't know if he laundered that money or if that was just part of. [00:22:19] Speaker B: Well, he ultimately got kickbacks, right? I mean, that's like, the biggest thing is. So he would turn around and they would lower their property taxes. They'd probably get paid some form of contingency fees, whatever. And then he would turn around and get kicked back from the consultants on the contingency fees that they would get for the lower property tax. [00:22:35] Speaker C: What's the ease of getting away with it? For this one. [00:22:38] Speaker B: For this one? [00:22:39] Speaker C: Yeah. How hard is it to catch somebody doing this? [00:22:41] Speaker B: No comment. [00:22:45] Speaker A: I'm like, JB, why do you need to know? [00:22:48] Speaker C: It's just an interesting part of this is like, I know why they think they can get away with it. [00:22:52] Speaker B: Well, look, if you're a business person, if you're a CFO, this is why you always ask questions about arm's length transactions. How do you know this vendor? How do you know this guy? Like, are you guys buddies? Are you family members? Whatever. Because when you start getting into situations like that, it's going to be really easy to be sitting there and like, dude, these guys are getting back, like, $3 million in taxes. Why don't we just turn around and say they're only getting back, like, I don't know, 2.3 or, hey, better yet, let's boost it. Let's say they're getting back three point. .6 and I'll turn around and just, you can bill me for this, and then kick me back this, and boom, next thing you know, start doctoring up a little paperwork, and congratulations, you're a millionaire. [00:23:29] Speaker A: I should have just pulled, like, an office space kind of thing, where they just round it out and put the rounding differences in account, maybe get $20. [00:23:37] Speaker B: Just another one of those Monday details. [00:23:39] Speaker A: Yes, exactly. [00:23:42] Speaker C: Not a Monday detail. [00:23:43] Speaker A: So, obviously, a very egregious sales tax crime. He laundered more than 4 million or cost the company more than 4 million. He was sentenced to 24 months in prison and has to pay restitution of $10 million. [00:23:56] Speaker B: That's insane. [00:23:58] Speaker A: Absolutely worth it. You're right, JB. It's like, why do they think. I mean, why do they think they're not going to get. [00:24:03] Speaker C: People keep doing it, so everyone thinks they can get away with it, and then you do, and then you get Greedier and Greedier, and then eventually. [00:24:10] Speaker B: So here's this thing, and I'll tell you why I think people do it, is because they watch these shows. It's called the next 48 hours, or, like the first 48 hours or whatever. [00:24:20] Speaker A: I don't know what shows you're speaking of exactly. [00:24:22] Speaker B: And then you get these people all these ideas. They're like, man, this person was an idiot. I can turn around and kill that person and get away with it. [00:24:27] Speaker C: Sure. [00:24:28] Speaker B: I could steal this money and completely get away with it. Well, guess what? Not so much. [00:24:32] Speaker A: They never met me, obviously, because I can solve all the crimes. [00:24:35] Speaker B: Look. [00:24:35] Speaker A: No, probably not. Okay, so, number one, Georgia officials raid Gladys knights chicken and waffles restaurants. Now, why do you think I would put this at number, uh. [00:24:47] Speaker B: Cause you're a huge Gladys Knight fan. [00:24:50] Speaker A: No. Well, I mean, I'm not a Gladys Knight fan because, a, we live in Atlanta. [00:24:55] Speaker B: Bingo. [00:24:55] Speaker A: B, I have eaten here. Have either one of you eaten here? [00:24:59] Speaker B: I ate at Gladys Knight's chicken and waffles. It's pretty solid. [00:25:02] Speaker A: Yeah, it was solid back in the day, right? [00:25:04] Speaker B: Yep. [00:25:04] Speaker A: After a music, midtown. And you need something late night, you go to chicken and waffles. The place was amazing. [00:25:10] Speaker B: There you go. [00:25:11] Speaker A: So this was a very high profile case here in Atlanta. In 2016, the feds rated the restaurant. They had been watching it apparently for months, years, just for general income tax. They were getting tips. So he was accused of stealing over $650,000 in sales and withholding tax. [00:25:30] Speaker B: Oh, my God. [00:25:31] Speaker A: Sales and payroll tax. [00:25:32] Speaker B: Whoa. [00:25:33] Speaker A: Yes. And then he was sentenced to one year in prison in order to pay restitution of $1 million. [00:25:38] Speaker C: How do you steal that? [00:25:40] Speaker B: So let me tell you how stupid it is to steal withholding tax. So here's the deal. You turn around and don't remit on a 941 or remit on your state returns, withholding taxes. And then, well, twelve months later, somebody goes and files a personal income tax return and goes to get money back. And the state's like, these guys have never really paid anything in. I think you're getting busted. [00:26:01] Speaker C: So it's very easy to get caught. [00:26:04] Speaker B: On the withholding tax front. Yeah, absolutely. I mean, look, on all these fronts, it's going to be pretty easy to get caught nowadays. [00:26:11] Speaker A: Yes. Very stupid. [00:26:12] Speaker B: Yeah. [00:26:13] Speaker A: But the other reason why this is number one for me is because I can pull in a little bit of celebrity gossip in here. [00:26:19] Speaker B: Oh, boy. [00:26:20] Speaker A: So the level of egregiousness was raised in that TMZ, who we all know, very reputable source, reported that her son. Okay, so basically, Gladys Knight tried to sue her son to take her name and likeness off the restaurant after all this happened. Right. And then he tried to extort her and blackmail her in the process to say he was going to out her as having dementia, Alzheimer's disease if she didn't drop the lawsuit. What? And she said, I don't think so. And she still sued him. And she still. So. But poor gladys. Naomi, she just sounds amazing. I know. And your restaurant was amazing when it was running and processing chicken and waffles. Delicious, delicious waffles. That's been my list of top five sales, sex crimes. So how would you rank them? JB, that was great. [00:27:11] Speaker C: I think you did a good job. [00:27:12] Speaker A: Do you think Don Juan should have been a little higher? Sounds like. [00:27:14] Speaker C: I mean, just the number is insane. [00:27:17] Speaker A: Yeah. [00:27:17] Speaker C: I look forward to hearing if Tim has any more research on that. [00:27:21] Speaker B: Later, I will tell you, but by the next episode, I will 100% have more information on. [00:27:27] Speaker C: Just do a whole episode on Don Juan's. [00:27:30] Speaker A: Yes. [00:27:31] Speaker B: This has absolutely put me in the mood for a cheese enchilada and a margarita. I'm going to go crush this and literally research this entire case. [00:27:37] Speaker A: That sounds amazing. Yes. And if anyone else out there, if you have any sales tax crimes that we don't know about, email us at [email protected] and we'll do another episode. [00:27:48] Speaker B: I'm sure there are tons of them that we haven't covered today. Jenny, you did a fantastic job navigating this episode today. [00:27:54] Speaker A: Or if you need help solving a sales tax crime, you know who to call. Oh, God, I'm the lady. I'll do it in my pajamas. [00:28:00] Speaker B: Profession? Expert witness testimony right over here. Jenny will be your expert witness. [00:28:05] Speaker A: I will bring all my accessories. [00:28:07] Speaker B: Absolutely love it. [00:28:08] Speaker A: Yes, and you'll get everything gone. Did we offend anyone, JB? [00:28:12] Speaker C: Honestly, we did not. I mean, I was going to apologize to Gladys Knight, but we did a good job of saying. Yeah, you weren't know. [00:28:20] Speaker B: Hey, Mark camera. We're sorry we drug your name into this. I know that you've served your time and done your so. [00:28:25] Speaker C: But, hey, did he. Okay. [00:28:26] Speaker B: I mean, he committed the crime. [00:28:27] Speaker C: He paid him back. He did all the things he did. [00:28:29] Speaker B: His penance. [00:28:29] Speaker C: It's still his. Know, it's tough to have an apologies list during just a crimes podcast because. [00:28:35] Speaker B: Technically, didn't pay them back. He filed for then. [00:28:39] Speaker A: Well, I mean, he was ordered to. Doesn't mean he did it. [00:28:42] Speaker B: That's right. [00:28:42] Speaker A: Yeah. [00:28:42] Speaker B: Yes, we know there's a few of. [00:28:44] Speaker C: Those cases, as most people who get. [00:28:46] Speaker A: Ordered to pay things do not. [00:28:49] Speaker B: To wrap this all up, we appreciate you listening to taxing poetic today. You can listen to us on whatever format and platform that you listen to podcasts. I want to thank our esteemed producer, JB, and my wonderful host today, Jenny Carter, for her wonderful work. [00:29:06] Speaker A: You mean Sherlock? [00:29:06] Speaker B: Yes, Sherlock. And I am Tim Howe. We are signing off on behalf of at the Nexus Stack solutions. We thank you so much. Have a great day. [00:29:12] Speaker A: Bye, everyone.