Nadim ‘Nick’ Saifan Jr., Tax Evasion, California 2006

OC Contractor Pleads Guilty to Tax Evasion

Nadim ‘Nick’ Saifan Jr., 48, the owner of a Huntington Beach-based military contractor, pleaded guilty to two counts of attempted tax evasion for failing to report millions of dollars his company received for providing services to the military in Iraq.

Saifan, who resides in Huntington Beach, pleaded guilty to underreporting income on his company’s 2005 corporate tax return and his personal tax return for 2006. He was the owner and operator of Defense Logistical Support & Services Corporation (DLSS), which provided services to the military and some civilian companies in Iraq.

DLSS received nearly $16 million from the United States military alone for services in Iraq from August 2004 through October 2007, according to court documents. Saifan reported only a small fraction of this income on DLSS’s corporate tax returns filed with the IRS.

In addition to failing to report millions of dollars of corporate income, Saifan used DLSS funds to pay for personal expenses without reporting this money as personal income. Prosecutors alleged that he used corporate money to make approximately $880,000 in down payments on real estate and approximately $292,000 in payments towards vehicles that included a Ferrari and a Rolls-Royce.

Prosecutors preparing for trial wrote that Saifan owes at least $4.5 million in unpaid corporate and personal taxes for the several years charged in the indictment, and that he caused a total tax loss to the government of at least $7 million.

Saifan pleaded guilty before United States District Judge Cormac J. Carney, who is scheduled to sentence the defendant on August 18. At sentencing, Saifan will face a statutory maximum sentence of 10 years in federal prison. After Saifan pleaded guilty yesterday, Judge Carney revoked Saifan’s bond and remanded him into federal custody pending his sentencing.

The case against Saifan was investigated by the Defense Criminal Investigative Service and IRS – Criminal Investigation.

Saifan’s sentencing is set for August 18. In the meantime, he will be held in federal custody.

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