Additional federal tax charges filed against convenience store owners

DECATUR, Oct 31, 2009 (Herald and Review - McClatchy-Tribune Information Services via COMTEX) -- CILL | Quote | Chart | News | PowerRating -- Additional federal grand jury indictments have been returned against Central Illinois residents who operated food and liquor stores in Decatur and Peoria and allegedly defrauded the state and federal governments of income taxes, the U.S. Attorney's Office for Central Illinois announced Friday.

Jalal Nimer Asad, Nader Jamil Qatoum and Mohamed Rebhi Qattoum, all of Decatur, and Imad Ribhi Abdallah of Washington were charged with a number of offenses, including tax fraud conspiracy and tax evasion related to the alleged failure to report and pay nearly $700,000 in corporate federal income taxes and mail fraud in connection with a scheme to defraud the state of sales tax revenues.

A grand jury indictment originally was returned March 3 against Asad, Qattoum and Abdallah for tax conspiracy and evasion and mail fraud for their operation of Ayat 1 Inc., doing business as Price Rite Food & Liquor in Decatur. Abdallah also was charged with signing false tax returns for that business.

On July 7, the grand jury returned a superseding indictment that repeated the charges in the original indictment and added a second business, JB Food & Liquor of Decatur, to the conspiracy, evasion and mail fraud counts. The superseding indictment also added Qatoum as a defendant in those counts and charged him with signing false tax returns for JB Food & Liquor.

The grand jury returned a second superseding indictment Oct. 7 that repeated the original charges and added a third business, Super Saver of Peoria, to the conspiracy and mail fraud counts. Abdullah was charged with signing false tax returns for that business and making false statements to the Illinois Department of Human Services to obtain health care benefits.

Mohamed Rebhi Qattoum, Ribhi A. Qattoum and Raeda A. Kattom were charged with witness tampering. Mohamed Qattoum and Nader Qatoum also were charged with making false statements to federal agents.

The latest indictment alleged that, from July 2001 to April 2008, the men conspired to operate the three businesses in such a way as to impede, impair, obstruct and defeat the ability of the Internal Revenue Service to ascertain, compute, assess and collect the companies' income taxes.

It also alleged that, although a substantial portion of each corporation's business was transacted in cash, the defendants failed to deposit all of the cash in the corporation's bank accounts and generally split the remaining undeposited cash among them.

The defendants allegedly maintained two sets of business records for each corporation, one that reflected the true nature of each business's income and expenses and another that substantially underreported the true income. Information for the false set of books allegedly was provided to the business's accountant for use in preparing corporate U.S. income tax returns and state sales tax returns.

This resulted in the businesses underreporting their respective gross receipts by more than $2.1 million during the time period of the alleged conspiracy.

The Asads were further indicted Oct. 21 by the grand jury on one count of conspiracy to structure transactions to avoid reporting requirements and four counts of unlawful money structuring related to the business practices of WISAM 1 Inc., doing business as Sheridan Liquors in Peoria. Their scheme was aimed at evading a federal law that requires cash transactions exceeding $10,000 be reported to the U.S. Treasury.

Jalal Nimer Asad held an ownership interest in the store and was involved in its management and operations from August 2005 to March 2007. Mohamed Nimer Asad was involved in the store's management and operations.

While the business primarily sold liquor and other products, it also cashed checks for a fee. However, it was not licensed by the state to operate a check-cashing business.

From June 2003 to March 2007, the indictment alleges the Asads withdrew more than $4 million in cash from Sheridan Liquors' bank accounts by writing checks payable to cash, which were structured to avoid the reporting requirements.

The indictment seeks forfeiture of $4 million in any property involved in or traceable to the structuring offenses.

Both men are scheduled for arraignment on the new charges Nov. 5 in U.S. District Court in Peoria.

A status hearing on the older charges is scheduled for Nov. 19 in U.S. District Court in Urbana.

Conviction of conspiracy to structure financial transactions or unlawful money structuring carries a penalty of five years in federal prison for each count.

The maximum prison term upon conviction for each count of conspiracy to defraud the IRS, tax evasion, making false statements to government agents and for making false statements to obtain health care benefits is five years, for mail fraud or witness tampering is 20 years and for signing a false tax return is three years.

To see more of Herald & Review, or to subscribe to the newspaper, go to
http://www.herald-review.com Copyright (c) 2009, Herald and Review, Decatur,
Ill. Distributed by McClatchy-Tribune Information Services. For reprints, email
tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax
to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave.,
Suite 303, Glenview, IL 60025, USA.

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index