Seattle, Washington – In a shocking case of tax evasion, Assad Baragzai, 47, of Yarrow Point, Washington, was sentenced to 10 months in prison and a $75,000 fine for making and subscribing a false tax return. The sentence was handed down today in U.S. District Court in Seattle, Washington.
Between 2016 and 2020, Baragzai, the owner of a string of bikini barista coffee stands, failed to report as much as $6 million in income on his tax returns. The tax loss over the five years that Baragzai underreported his income is more than $1.7 million, according to records in the case.
“Our government relies on the 85 percent of Americans who each year pay the taxes they owe to keep communities safe, and provide all the other important services we need,” said U.S. Attorney Tessa M. Gorman. “Mr. Baragzai had great business success, but failed to fund the community that made that success possible. Such conduct is not erased by paying what is owed some five years later – it is appropriate that he serve prison time for his willful tax fraud.”
Assistant United States Attorney Mike Dion wrote to the court that Baragzai reaped the benefits of American society but somehow convinced himself that he did not need to pay his share of the costs that support that society. “All Americans pay a price for this kind of selfishness. For example, school lunches are provided by the United States Department of Agriculture’s Food and Nutrition Service. But for this prosecution, Baragzai’s tax fraud would have cost the government the equivalent of 462,000 school lunches,” Dion said.
Baragzai has agreed to pay restitution to the IRS. He may also face additional civil penalties, fines, and interest for the tax loss. The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Michael Dion.
Baragzai is the second defendant to be sentenced in this investigation. In October 2024, Baragzai’s brother-in-law, 45-year-old Rajesh Mathew, of Auburn, Washington, was sentenced to 30 days in jail, a $5,000 fine, and 100 hours of community service for making and subscribing a false tax return.
“Assad Baragzai reaped the benefits of American society but somehow convinced himself that he did not need to pay his share of the costs that support that society,” said Assistant United States Attorney Mike Dion. “Instead of paying his fair share toward public resources as every law-abiding American does, Mr. Baragzai misrepresented his income to furnish an already-lavish lifestyle,” said Adam Jobes, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office.
U.S. District Judge Tana Lin said at the sentencing hearing, “The tax system ‘is an honor system… and you weren’t honorable. (There was) absolutely no reason for you to be cheating on your taxes except for pure greed.”
The defendant’s significant underreporting of income was found when he provided information to his tax accountant. He disputes the government figures and argued that he had some legitimate deductions making the tax loss is $1.3 million. However, Judge Lin determined the tax loss was $1,348,154.
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Key Facts
- State: Washington
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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