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Tag Archive | "tax evasion"

Owner of Mexican restaurant chains sentenced to prison 


 

A Hudsonville man that owns 90 Mexican restaurants across five states, including 24 in Michigan, will spend the next year in federal prison for tax evasion.

Marco Cuellar, 37, was sentenced in U.S. District Court this week to serve 12 months in prison for filing false tax returns, U.S. Attorney Patrick A. Miles, Jr. announced Tuesday.

Before his sentencing, Cuellar was also required to pay approximately $370,000.00 in restitution to the Internal Revenue Service in back taxes and penalties.

According to his plea-agreement with the U.S. Attorney’s Office, Cuellar filed false tax returns for 2008 through 2012 with the Internal Revenue Service. During those years, Cuellar skimmed cash from his restaurants located in Michigan and then failed to report that income in his tax returns for those years; as a result, Cuellar avoided paying taxes on $607,914.00 of unreported income.

“Successful business owners have the same legal duty to pay their taxes as any other taxpayer, and any business owner who uses his or her business to cheat the tax-paying public has to understand that he or she runs the real risk of winding up as a defendant in Federal court,” stated U.S. Attorney Miles. “Mr. Cuellar ran that risk, and now he’s on his way to prison.”

“Cheating on your taxes is the same as stealing,” said Special Agent in Charge, Manny Muriel, of IRS Criminal Investigation. “Individuals who corruptly violate the law to further their business interests and intentionally evade paying their fair share of taxes undermine public confidence in our tax system and unfairly disadvantage businesses that follow the rules. As Marco Cuellar has discovered, operating outside the law and failing to pay taxes has severe consequences.”

As a citizen of Mexico who is present in the United States as a lawful permanent resident, Cuellar also faces removal proceedings back to Mexico once he is released from the Bureau of Prisons.

Cuellar owned/co-owned over 90 restaurants in MI, MS, IL, OH and LA. There were 24 in MI incorporated as “S” corporations under names: “La Pinata, Inc.” (one location); “El Burrito Loco, Inc.” (five locations); “Loz Aztecas, Inc.” (three locations); “Cinco de Mayo, Inc.” (two locations); “El Ranchero, Inc.” (one location); “El Rancho, Inc.” (four locations); “Los Cabos, Inc.” (one location); “San Marcos, Inc.” (three locations); “La Herradura, Inc.” (two locations); “Loco Burrito, Inc.” (one location); and “Don Luis, Inc.” (one location).

Restaurant locations included Kalamazoo, Grand Rapids, Big Rapids, Battle Creek, Mt. Pleasant, Allendale, Rockford, Petoskey, Ludington, Holland, Gaylord, Novi, Grand Haven, and Traverse City.

This case was prosecuted by Assistant U.S. Attorney Hagen W. Frank, and was investigated by Special Agents of the IRS Criminal Investigation Division and Homeland Security Investigations, U.S. Immigration and Customs Enforcement.

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Rockford man sentenced for tax evasion


Chiropractor Kerry Kilpatrick has been sentenced.

Grand Rapids chiropractor Kerry Thomas Kilpatrick, age 57, of Rockford, was sentenced Tuesday, May 3, to federal prison for felony tax evasion, announced U.S. Attorney Donald Davis.
U.S. District Judge Robert Holmes Bell, Kilpatrick ordered that Kilpatrick serve two years in federal prison followed by two years of supervised release. The Judge also ordered Kilpatrick to cooperate with the IRS and pay restitution of $85,014 for taxes owed in 2002. The Judge noted that Kilpatrick also owes a total of $467,243.91 for tax years1999-2007, not including interest and penalties.
Kilpatrick admitted that he evaded paying taxes for income that he earned as owner of the Kilpatrick Chiropractic Life Center in Grand Rapids for the 2002 tax year. In a written plea agreement, Kilpatrick acknowledged that did not any pay federal income taxes on income earned from 1999-2007, during which time the Kilpatrick Chiropractic Life Center had gross deposits of over $3,000,000.00.
According to court records, during 1999 through 2007, Kilpatrick was a self-employed chiropractor at Kilpatrick Chiropractic Life Center, Grand Rapids, Michigan. Kilpatrick paid himself through direct payments from his business credit union account without including any withholdings for state or federal payroll taxes. Kilpatrick also used the business credit union account to make direct payment on his home mortgage, along with other personal expenditures.
During 2001 through 2002, Kilpatrick formed numerous holding companies, corporations, and enterprises that lacked any economic substance and were located in Nevada, Oregon, and the Republic of Panama. He used the entities to evade his income taxes, pay local property taxes on his real estate, and to hold the title on his 1999 Ford Expedition, $63,000 Tiffin Motor Home, and other real property. After failing to file timely 1999 though 2005 personal tax returns,
Internal Revenue Service personnel provided Kilpatrick with documents entitled “Why Do I Have To Pay Taxes?” and “The Truth About Frivolous Arguments.” In 2006, Kilpatrick filed tax returns and reported over $1 million in adjust gross income, but claimed false Schedule “A” deductions equal to the adjusted gross income, causing zero taxable income.
At the sentencing hearing, Judge Bell emphasized that instead of relying on the advice of professionals, like CPAs and attorneys, Kilpatrick choose to follow the advice of “internet goofballs” in determining whether he should pay taxes. “Those who choose to disrespect the law and flagrantly continue to use frivolous arguments will be held accountable,” said Special Agent in Charge Erick Martinez. “The law is crystal clear; people must file accurate returns and pay their taxes.”
This case was investigated by special agents of the IRS Criminal Investigation and was prosecuted by U.S. Attorney Donald A. Davis and Assistant U.S. Attorney Raymond Beckering III.

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Rockford man pleads guilty to tax evasion


Kilpatrick

Dr. Kerry Kilpatrick, indicted for tax evasion, poses with the Michigan Surgeon General Kimberly Dawn Wisdom MD at the Michigan Department of Community Health’s awards program. Dr. Kilpatrick received an award for his leadership in the chiropractic association’s public education programs.

Grand Rapids chiropractor Kerry Thomas Kilpatrick, age 55, of Rockford, pled guilty last week to felony tax evasion.
At a hearing before U. S. District Judge Robert Holmes Bell, Kilpatrick admitted that he evaded paying taxes for income that he earned as owner of the Kilpatrick Chiropractic Life Center in Grand Rapids for the 2002 tax year. As part of the plea agreement, Kilpatrick acknowledged that he will be responsible for repayment of all unpaid taxes from 1999 to the present as well as interest and penalties.
In the written plea agreement, Kilpatrick acknowledged that he did not pay federal income taxes on income earned from 1999-2007, during which time the Kilpatrick Chiropractic Life Center has gross deposits of over $3,000,000.00. During this time Kilpatrick set up a variety of shell companies, both in the Republic of Panama and in other states, which were used to hold a variety of personal assets. Kilpatrick also acknowledged that, after being contacted by the Internal Revenue Service in 2005, Kilpatrick filed tax returns for 1999-2007 that listed taxable income of over $1,500,000.00; however, these returns also reported deductions in the exact amount of his income, which resulted in no reported taxable income for each year. At his plea hearing, Kilpatrick admitted that he did not have any such legitimate deductions.
At a sentencing hearing scheduled for May 3, 2011, Kilpatrick will be facing up to five years in prison and a $250,000 criminal fine in addition to the repayment of his taxes with interest and penalties.
This case was investigated by special agents of the IRS Criminal Investigation and is being prosecuted by U.S. Attorney Donald A. Davis and Assistant U.S. Attorney Raymond Beckering III.
U.S. Attorney Davis commented that: “People who cheat on their taxes steal from all of the citizens of this country. The investigation and prosecution of persons who violate the tax laws is, and will remain, a priority of this office.”

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