Semere Tsehaye, owner of multiple Instant Tax Service franchises across Illinois, Kansas, and Missouri, was convicted by a federal jury in St. Louis on two counts of tax evasion. The verdict caps a years-long scheme in which Tsehaye filed fraudulent tax returns to dodge more than $580,000 in federal taxes while operating businesses that were supposed to help others file honestly.
From 2005 to 2011, Tsehaye ran at least 20 ITS locations under the names A&S Tax Service LLC and ERI Enterprises LLC. The brand, Instant Tax Service, was a nationwide chain headquartered in Ohio. But while his franchises processed tax returns for thousands, Tsehaye was cooking his own books—generating fake financial summaries to drastically underreport his businesses’ gross receipts.
In 2010 and 2011 alone, Tsehaye falsified records to hide $547,000 and $1.03 million in income, respectively. Those false documents were handed to his personal tax preparer, who used them to file returns with the IRS. The result: a total tax loss to the government exceeding $580,000. Prosecutors called it a brazen betrayal of the system he profited from.
"Mr. Tsehaye’s attempt to evade his taxes by creating false financial summaries to conceal over $1.5 million of income and by filing false tax returns is a theft from the American public," said Karl Stiften, Special Agent in Charge of IRS-Criminal Investigation. "We all pay when others swindle the government."
The DOJ’s blow comes after prior civil action: in 2013, a federal court in Kansas City, Kansas, permanently barred Tsehaye and A&S Tax Service from operating any tax preparation business or filing federal returns. That injunction set the stage for the criminal case that finally held him accountable.
Sentencing is scheduled for January 4, 2017. Tsehaye faces up to five years in prison for each count of tax evasion, plus supervised release and steep financial penalties. Principal Deputy Assistant Attorney General Caroline D. Ciraolo praised IRS-CI agents and Tax Division prosecutors for their work, signaling the federal government’s continued crackdown on tax fraud at every level.
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Key Facts
- State: Missouri
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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