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Local Strip Club Owner Caught Cheating on Taxes
Nicholas J. Faranso, owner of two Detroit-area strip clubs, BT’s in Dearborn and Tycoon’s in Detroit, was sentenced to one year and one day in prison for conspiring to defraud the United States by underreporting his businesses’ sales to cheat on taxes.
According to court documents, Faranso purchased a computer software program called Journal Sales Remover in 2001, specifically designed to remove a portion of the actual sales from the computerized point of sales systems. Faranso directed the programmer, Theodore Kramer, to put the Journal Sales Remover program onto his businesses’ computer systems to help him cheat on taxes.
Over a period of three years, Kramer made periodic visits to Faranso’s clubs to run the Journal Sales Remover program, removing a substantial amount of actual sales from the computerized sales systems. Faranso then provided the reduced sales figures to his accountant, resulting in the falsification of the clubs’ tax returns by understating their gross receipts by more than $500,000.
Faranso pleaded guilty on January 12, 2011, and was sentenced on the same day. In addition to the prison term, Faranso was ordered to serve two years of supervised release and pay $6,000 in restitution.
The investigation was conducted by the IRS Special Agents, and the case was prosecuted by Tax Division Trial Attorneys Kenneth C. Vert and Tiwana L. Wright.
Faranso’s actions are a reminder of the importance of honesty and transparency in business dealings. As the owner of two strip clubs, Faranso had a responsibility to report his businesses’ sales accurately and pay his fair share of taxes.
The sentencing of Nicholas J. Faranso serves as a warning to businesses and individuals who attempt to cheat on taxes. The consequences of such actions can be severe, including imprisonment and fines. It is essential for individuals and businesses to comply with tax laws and regulations to avoid such penalties.
Key Facts
- State: Michigan
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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