Reaping All the Benefits

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44969068 - office work and filling in tax returns close up

Located north of Charlotte, North Carolina lies Lake Norman, the largest man-made lake in the state. This popular area provides an enjoyable spot for lake living, dining and recreation. Today’s fraudster, the owner of a popular restaurant in the area, enjoyed all the benefits of living near and operating the lakeside establishment, but committed tax fraud by failing to pay several million dollars to the Internal Revenue Service (IRS).

Over three tax years, the owner of the profitable lakeside bar and grill failed to pay approximately $2.8 million in additional gross receipts to the IRS by submitting false tax returns. (This meant he owed an additional $320,000 in taxes. Definitely not chump change.)

The owner of the family-friendly establishment that also welcomed dogs neglected to share a large part of the restaurant’s gross receipts with his tax preparer. (Because he hid this information, his tax preparer inadvertently claimed multiple tax credits he was not entitled to receive.)

To stay below the IRS radar, he also made sure he made cash withdrawals in amounts that did not require him to complete a currency transaction report (CTR). (A CTR is a report that financial institutions must complete when an amount of more than $10,000 is involved in a transaction.) By keeping each of his withdrawals under $10,000, he avoided scrutiny. (Over about two months, he completed approximately 15 withdrawals from his bank account totaling about $142,000.)

So, are you wondering what the restaurant owner used those extra business funds for? He spent $375,000 on two houses and $80,000 on travel and home improvements. (So, he reaped all of the benefits from owning and operating this profitable business, but he didn’t want to pay any taxes. He scammed the government and his patrons who paid their taxes each time they visited the lakeside eatery.)

The 49-year-old fraudster from Mooresville pleaded guilty to tax fraud and was sentenced to eight months in prison and eight months of confinement in his home for tax evasion. He agreed to pay about $537,000 in restitution to the IRS.

In court, the North Carolina restaurant owner’s lawyer explained that his client did not live an extravagant life. (Although he bought two houses and $80,000 worth of cars. Sounds pretty extravagant to me.) His wife told the judge that he was a good man and did everything for his family. (Well, somewhere along the way he missed the point that honest men don’t commit tax fraud for anyone, family or not.) This fraudster won’t be enjoying any sun, fun or refreshments in the near future. Instead of reaping the benefits, he’ll be experiencing the consequences of his fraudulent actions over the next 16 months.

Today’s “Fraud of the Day” is based on an article entitled, ‘I know what I did was wrong,’ Lake Norman restaurateur tells judge at sentencing,” published by The Charlotte Observer on September 5, 2017.

STATESVILLE – The owner of a landmark Lake Norman restaurant was sentenced to eight months in prison followed by eight months of confinement in his Mooresville home on Tuesday for attempted tax evasion.

Peter Gjuraj, 49, owner of the Blue Parrot Grill on N.C. 150 West in Mooresville, admitted to hiding about $2.8 million in income and filing false returns. He originally faced up to five years in prison, but prosecutors in the end requested an 18-month sentence with good behavior.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.