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Judge sentences bar owner for obstruction

April 14, 2017
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Bar stools line the side of a bar. Photo via

A Grand Rapids bar owner who was convicted of skimming $400,000 from his businesses and destroying sales records to hide them from the Internal Revenue Service has been sentenced for his crime.

Brian Farah was sentenced to 13 months in federal prison for obstructing an IRS audit, according to the U.S. Attorney’s Office for the Western District of Michigan today.

U.S. District Judge Paul Maloney also ordered Farah to pay restitution, a $5,000 fine and serve one year on supervised release after his prison sentence.

Farah and his father, Michael Farah, own three Grand Rapids-area bars, Farah’s, Kuzzin’s and Drake’s.

Michael Farah will be sentenced in July.

They previously pled guilty to the obstruction charge, admitting that they deleted business records after receiving notice of an IRS audit, according to the U.S. Attorney’s Office.

The office said in 2013, the father and son skimmed $232,000 in cash from the bars, which they did not report on their business tax returns or individual tax returns. In 2014, they skimmed $176,000 in cash from the bars, which they did not report on their tax returns.

After receiving notice of an audit, the office said they tried to hide their crimes by deleting all of the bars’ sales records. They were caught when their sales software provider informed the IRS of the deletion.

Maloney said Farah’s conduct, which included “systematic and deliberate” destruction of business records and “lying directly to the face of an IRS agent,” was a “blatant” violation of tax laws.

“Schemes to conceal and insulate wealth in order to evade income tax, such as Brian Farah’s scheme, are unfair to every taxpayer who obeys the law and pays their fair share,” said Manny Muriel, special agent in charge of the Detroit field office, IRS Criminal Investigations.

“The public should know that IRS Criminal Investigations will do everything we can to hold individuals accountable to the same tax laws that they are subject to, ensuring that our tax system is fair to everyone.”

IRS Criminal Investigations investigated the case, and Assistant U.S. Attorney Clay Stiffler prosecuted.

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