Peoria business owner sentenced to 36 months in prison for tax offenses

 

Date: July 21, 2021

Contact: newsroom@ci.irs.gov

Peoria, IL — Alaa Iwaisi of Peoria, Ill., was sentenced on July 20, 2021, to 36 months in federal prison for filing false federal personal tax returns, aiding in the filing of false federal corporate returns, and mail fraud for mailing false small business corporation tax returns to the State of Illinois for tax years 2015, 2016, and 2017.

Iwaisi, who formerly owned and operated the MacArthur Corner Store Food & More in Peoria, pleaded guilty on March 3, 2021, to the nine-count indictment charging him with underreporting sales from the store on both federal and state returns. At Iwaisi's sentencing hearing, Senior U.S. District Judge Michael M. Mihm found that even though Iwaisi had actual receipts reflecting the store's sales, he provided false information about the sales to his return preparer. The judge also found that Iwaisi often paid employees and himself with cash straight from the cash register, despite being advised by the return preparer to issue company paychecks.

Also at sentencing, Judge Mihm further ordered that Iwaisi's prison term be followed by concurrent one- and three-year terms of supervised release on the tax and mail fraud charges, respectively. And the judge ordered Iwaisi to pay unpaid taxes amounting to $108,125 to the Internal Revenue Service and $86,105 to the Illinois Department of Revenue.

Until July 18, 2021, Iwaisi had been on bond, subject to conditions including that he refrain from transferring or dissipating any assets. Following the filing of petitions to revoke his bond for violating those conditions, Iwaisi was detained pending a hearing on the issue.

At the hearing, Judge Mihm revoked Iwaisi's bail and found that he had obstructed justice by encumbering and dissipating assets. The government presented evidence at the hearing showing that Iwaisi had used $5,000 as down payment for the purchase of a $62,000 Range Rover, sold a 2004 BMW for $4,500, transferred title of a Recreational Vehicle, sold a 2015 Range Rover for $35,000, and used assets to pay for inventory at a convenience store recently purchased by his ex-wife. The government also presented evidence that in seeking financing for the Range Rover, Iwaisi falsely claimed that he had monthly income of $10,000 from managing a liquor store. However, Iwaisi had reported to U.S. Probation that he was unemployed and receiving unemployment compensation from the State of Illinois.

"Paying taxes is a civic duty that allows our society to thrive and for us to care for those who need it the most," said Acting U.S. Attorney Douglas J. Quivey. "People who cheat the tax system will be held accountable to include serving prison time."

"This sentencing is a direct result of the excellent partnership IRS Criminal Investigation and the U.S. Attorney's office has in combating violations of Federal law," said Donald "Trey" Eakins, Acting Special Agent in Charge, IRS Criminal Investigation, Chicago Field Office. "This sentence should serve as an example to those who might think about trying to cheat the US tax system by under-reporting income. You will serve jail time for stealing from hard-working Americans."

The Internal Revenue Service, Criminal Division; United States Postal Inspection Service; and Illinois Department of Revenue, Criminal Investigations, conducted the investigation. Assistant United States Attorneys Darilynn J. Knauss and Katherine G. Legge represented the government in the prosecution.