Wednesday, January 20, 2016

Carthage restaurant owner pleads guilty to failure to pay $1.3 million in payroll taxes

(From the U. S. Attorney for the Western District of Missouri)

The former owner of Ziggies restaurants in Springfield and elsewhere, including Carthage, pleaded guilty in federal court today to failing to pay more than $1.3 million in federal payroll taxes.

Agim Zendeli, 43, of Springfield, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to an information that charges him with failure to pay over to the IRS the payroll taxes he collected from his employees.

Zendeli operated a chain of restaurants under the name “Ziggies” in Springfield, Republic, Willard, Marshfield, Nevada, West Plains, Rolla, Carthage and Poplar Bluff in Missouri, and in Fort Scott and Pittsburg in Kansas, from 1998 to 2014.

From March 2004 through December 2014, Zendeli opened and closed 18 companies he formed to operate as Ziggies. For each such company, Zendeli withheld federal income taxes and Social Security and Medicare taxes from his employees’ pay, and the employees believed those amounts had been paid over the IRS on their behalf. However, Zendeli admitted today, he did not pay those amounts over to the IRS as he was required to do.

From 2004 through 2014, Zendeli diverted substantial amounts of money from the restaurant LLCs he owned and operated. During this period, Zendeli lived a lavish lifestyle, and spent substantial sums on vacations, gambling trips, entertainment and luxury vehicles, including three BMWs, two Cadillac Escalades, two Infiniti QX56s, a 2009 Mercedes, a 2008 Acura and a 2004 Land Rover.

In order to avoid IRS collection of past due employment taxes, Zendeli repeatedly formed new entities to continue restaurant operations. Once each company accumulated a large tax debt to the IRS, Zendeli ceased operating under that company’s name and opened a new entity, often in the name of a family member, partner, or employee. Zendeli, however, maintained custody and control of the businesses.

The total tax loss resulting from the scheme for all entities controlled by Zendeli totals $1,330,708, which includes $741,099 in payroll taxes he deducted from his employees’ pay, plus the required employer’s contributions to Social Security, Medicare and unemployment taxes. Under the terms of today’s plea agreement, Zendeli must pay the government $1,330,708 in restitution, as well as statutory interest.

In addition, Zendeli attempted to avoid payment of approximately $654,260 in past due federal and state employment taxes by filing bankruptcy on March 26, 2010. Prior to the bankruptcy, Zendeli divorced his wife and transferred the trademarked name “Ziggies®” to his father, for a token payment. (Funds from the 2011 sale of trade name “Ziggies®” were remitted through Zendeli’s bankruptcy proceedings, after the trustee determined a fraudulent transfer of assets had occurred.)

Under federal statutes, Zendeli is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation.

1 comment:

Dusty Roads said...

Too bad he did not spend any of the money on a good pest control program, that place in Carthage is a roach fest