A 39-year-old man who owned tax-return preparation franchises in three states, including Illinois, was found guilty of tax evasion recently in federal court, according to a news release from the Department of Justice.
Principal Deputy Assistant Attorney General Caroline D. Ciraolo said the defendant, Semere Tsehaye, had been charged with two counts of tax evasion in February. Ciraolo said Tsehaye ran a business from 2005 to 2011 called Instant Tax Service, with at least 20 locations in and around East St. Louis, St. Louis, Kansas City, Kan., and Kansas City, Mo. A jury trial was held in St. Louis.
Tsehaye is scheduled to be sentenced on Jan. 4. He faces a statutory maximum sentence of five years in prison for each count.
“While Semere Tsehaye was operating tax return preparation franchises in three states, he was generating false financial summaries and filing fraudulent returns to evade paying his own taxes,” Ciraolo said in a news release. “No one is above the law, and the department will continue to prosecute those who seek to violate our nation’s tax laws.”
Tsehaye’s business operated under two entities named A&S Tax Service LLC and ERI Enterprises LLC, according to the prosecutors.
IRS Special Agent Karl Stiften said Tsehaye created the false financial summaries to conceal more than $1.5 million of income by filing the false tax returns.
Ciraolo said evidence at trial showed that the financial summaries understated the gross receipts generated by A&S and ERI by $547,000 in 2010 and $1.03 million in 2011.
Prosecutors said evidence also showed that Tsehaye’s tax return preparer used these financial summaries to prepare Tsehaye’s individual income tax returns, which Tsehaye then filed with the IRS.
The IRS conducted the investigation, and the DOJ’s Tax Division prosecuted the case. The U.S. Attorney’s Office for the Eastern District of Missouri assisted with the investigation.