Bethesda? Yikes.

[Demosthenes]

Wednesday, Dec. 17, 2008
Bethesda contractor sentenced for tax evasion
by Bradford Pearson | Staff Writer

A Bethesda home improvement contractor was sentenced to more than a year in prison Monday for not paying $1.4 million in taxes.

Jeffrey Sarris, 48, was sentenced in U.S. District Court in Greenbelt to serve a year and a day in prison, and three years of supervised release, according to the U.S. Department of Justice.

"Business owners who evade taxes gain an unfair advantage over law-abiding taxpayers," U.S. Attorney Rod J. Rosenstein said in a statement.

Since 2000, Sarris has owned Bethesda Home Improvement Corporation, a company that operated mainly in Maryland and Washington, D.C. Between 2001 and 2004, Sarris would cash his customers' checks at a restaurant in Rockville, and then save large amounts of the cash obtained in a safe-deposit box.

The Rockville restaurant was not named in the plea agreement or throughout the proceedings, according to U.S. District Court Spokeswoman Vickie LeDuc.

Sarris would use the cash to pay employees, subcontractors and to buy building materials from suppliers. He did not maintain a personal bank account, officials at the court said.

Internal Revenue Service records indicate that Sarris failed to file individual tax returns in 1994, 1995, and from 1997 through 2003. He also did not respond to IRS notices regarding his personal and business tax returns from 1988 to 2003.

During a May 2005 interview with the IRS, Sarris denied cashing the checks at the Rockville restaurant and accumulating the cash kept in the safe deposit box, but those statements were later determined to be false.

In a plea agreement, Sarris admitted that from 2000 through 2004 he failed to report more than $1.4 million in income, and was responsible for a total tax loss of $981,549.

[Demosthenes]

Jurors don't matter. He already pled guilty and got a handslap (a year and a day.)

His company placard is on about every tenth house in my neighborhood.

[Imalawman]

His company placard is on about every tenth house in my neighborhood.

Well, you have that comforting thought going for you.........

Which is nice....

[LPC]

D.C. Between 2001 and 2004, Sarris would cash his customers' checks at a restaurant in Rockville,

What kind of restaurant routinely cashes checks for what should have been thousands of dollars each? This was not someone cashing a paycheck for a few hundred dollars. If this was any sort of home improvement business, this guy was getting checks for thousands of dollars each week.

He supposedly failed to report $1.4 million in income over five years. If all of that went through the restaurant, he was cashing checks of more than $5,000 each week.

It's possible that the restaurant was audited and the IRS got curious about why the restaurant was depositing checks worth more than the restaurant was reporting in gross receipts. (Although the failure to file business tax returns was the more likely tip-off.)

[Nikki]

D.C. Between 2001 and 2004, Sarris would cash his customers' checks at a restaurant in Rockville,

What kind of restaurant routinely cashes checks for what should have been thousands of dollars each? This was not someone cashing a paycheck for a few hundred dollars. If this was any sort of home improvement business, this guy was getting checks for thousands of dollars each week.

He supposedly failed to report $1.4 million in income over five years. If all of that went through the restaurant, he was cashing checks of more than $5,000 each week.

It's possible that the restaurant was audited and the IRS got curious about why the restaurant was depositing checks worth more than the restaurant was reporting in gross receipts. (Although the failure to file business tax returns was the more likely tip-off.)

$5,000 per night is a bad night for quite a few Rockville restaurants. Many of them do that much over the lunch hour.

[wserra]

What kind of restaurant routinely cashes checks for what should have been thousands of dollars each?

The Laundromat.

[Judge Roy Bean]

D.C. Between 2001 and 2004, Sarris would cash his customers' checks at a restaurant in Rockville,

What kind of restaurant routinely cashes checks for what should have been thousands of dollars each? This was not someone cashing a paycheck for a few hundred dollars. If this was any sort of home improvement business, this guy was getting checks for thousands of dollars each week.

He supposedly failed to report $1.4 million in income over five years. If all of that went through the restaurant, he was cashing checks of more than $5,000 each week.

It's possible that the restaurant was audited and the IRS got curious about why the restaurant was depositing checks worth more than the restaurant was reporting in gross receipts. (Although the failure to file business tax returns was the more likely tip-off.)

Your seeing what happens when you scratch the surface of the 'un-banked' working class. In certain places cash is about the only thing ever used. And most remodels I've seen were done with half up front and then progress payments (or for materials) and one final payment.

I doubt the restaurant was depositing more in checks than their reported receipts. If it was the typical joint where you see construction workers (lots of trucks in the parking lot) you can bet more than half their customers pay in cash because they get paid in cash. If they're open for breakfast and lunch $5K a week wouldn't keep their doors open and chances are, their workers are being paid in cash, too.