Ali Sher Khan, Tax Evasion, New Jersey 2016

CAMDEN, N.J. - Two South Jersey restaurant owners have been charged with tax evasion, harboring illegal aliens, and making false statements to investigators.

Ali Sher Khan, 51, of Haddon Township, New Jersey, and Ali Khan, 48, of Clementon, New Jersey, are charged in an indictment that was unsealed today.

Ali Sher Khan is charged with one count of conspiracy to evade income taxes; 20 counts of failing to collect, account for, and pay over payroll taxes for corporate entities of two Crown Fried Chicken restaurants; three counts of income tax evasions for years 2014 through 2016; one count of harboring illegal aliens; one count of unlawful employment of aliens; and one count of making false statements to the IRS and FBI.

Ali Khan is charged with one count of conspiracy to evade income taxes; 10 counts of failing to collect, account for, and pay over payroll taxes for corporate entities of two Crown Fried Chicken restaurants; three counts of income tax evasion for the years 2014 through 2016; one count of harboring illegal aliens; and one count of unlawful employment of aliens.

According to documents filed in this case and statements made in court, Ali Sher Khan and Ali Khan, along with others, operated two Crown Fried Chicken restaurants in Camden. Ali Sher Khan and other individuals also operated a Crown Fried Chicken restaurant in Burlington Township, New Jersey.

Ali Sher Khan and Ali Khan allegedly employed illegal aliens at the restaurants. Those employees were paid in cash, and Ali Sher Khan and Ali Khan failed to deduct payroll taxes from the employees’ pay, as required by law. When Ali Sher Khan and Ali Khan caused payroll tax forms to be filed with the IRS, those forms did not accurately reflect the number of employees working the restaurant. Ali Sher Khan and Ali Khan failed to pay over to the IRS the correct amount of payroll taxes.

From 2013 to 2016, Ali Sher Khan and Ali Khan took substantial amounts of cash out of the businesses and did not report it on their income tax returns. Ali Sher Khan did not disclose to the IRS on his personal tax return $831,517 in income from the Crown Fried Chicken restaurants, causing a tax loss of $252,131. Ali Khan did not report or otherwise disclose to the IRS on his personal tax return $394,894 in income from the Crown Fried Chicken restaurants, causing a tax loss of $113,836.

Ali Sher Khan made his initial appearance today before U.S. Magistrate Judge Joel Schneider and was released on $250,000 unsecured bond.

The conspiracy count, tax evasion counts, failing to collect, account for, and pay over payroll taxes count, and false statements count each carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The harboring illegal aliens count carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The unlawful employment of aliens count carries a maximum penalty of six months in prison and a $3,000 fine.

Source: https://www.justice.gov/usao-nj/pr/restaurant-owners-charged-tax-offenses-and-other-crimes