Thursday, August 18, 2016
BOSTON – A man who operated a Boston-area fried chicken restaurant has been charged with conspiring to file false tax returns as part of a long-running scheme to avoid paying payroll and income taxes.
Hazrat Khan, 56, of Middletown, NY, was indicted on one count of conspiracy to defraud the United States and 11 counts of willful failure to account for and pay taxes. Khan was previously indicted in April 2016 on similar charges relating to two other Boston-area fried chicken restaurants that he operated.
According to the indictment, Khan used a variety of means to avoid paying payroll and income taxes owed by his restaurant, New York Fried Chicken, located on River Street in Hyde Park. As part of the conspiracy, Khan directed a co-conspirator to manage the restaurant and took steps to conceal his ownership interest. Khan provided tax preparers with false information about the restaurant’s payroll and income. Federal law requires employers to withhold payroll taxes and pay them to the IRS. As part of the scheme, Khan falsely reported the number of employees, some of whom were undocumented, and wages paid to the IRS. He also paid employees under the table and filed income tax returns under penalties of perjury that falsely described their sales, total income, compensation of officers, salaries, wages, and taxable income.
The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 and restitution. The charge of failure to account for and pay taxes provides for a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and the costs of prosecution and restitution. Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Boston Police Commissioner William Evans, made the announcement today. The case was investigated with the cooperation of the Massachusetts Insurance Fraud Bureau. The case is being prosecuted by Assistant U.S. Attorneys John A. Capin and Eric P. Christofferson of Ortiz’s Criminal Division.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.