Washington, DC—(ENEWSPF)—October 23, 2014. Today, two West Bloomfield, Michigan, residents pleaded guilty to tax fraud in the U.S. District Court for the Eastern District of Michigan, announced the Justice Department and Internal Revenue Service (IRS).
Maher Bashi, who served as Happy’s Pizza’s corporate chief operating officer, and Tom Yaldo, an owner of numerous Happy’s Pizza franchises, pleaded guilty to conspiracy to defraud the United States. According to the indictment, their conduct included, among other things, creating and maintaining fraudulent accounting records and falsely reporting income taxes and payroll taxes.
A multiple count indictment was unsealed July 16, 2013, alleging that from approximately June 2004 through April 2011, Bashi, Yaldo and others conspired to divert business receipts, underreport wages and understate the true income and expenses of specified Happy’s Pizza franchises. According to the indictment, the scheme resulted in the specified franchises paying more than $2.1 million in unreported wages to employees and shareholders.
Documents filed with the court indicate Bashi, Yaldo and others executed a scheme which systematically underreported the taxable income and payroll taxes of Happy’s Pizza franchises to the IRS and distributed the resulting gain among the conspirators and other Happy’s Pizza franchise partners. Additionally, documents filed with the court indicate Yaldo caused at least three Happy’s Pizza franchises in which he held an ownership interest to file false corporate income tax returns in 2008 and 2009 that underreported a total of more than $1,581,000 in gross receipts. According to the plea agreement, Bashi and Yaldo will pay restitution to the IRS for unpaid income taxes and employment taxes.
Bashi and Yaldo each face a statutory maximum sentence of five years in prison and a fine of up to $250,000.
This case was investigated by IRS – Criminal Investigation, the Drug Enforcement Administration and the FBI. It is being prosecuted by Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Justice Department’s Tax Division.