The Seattle coffee scene has been brewing with more than just caffeine lately as Rajesh Mathew, the owner of several bikini barista stands, was served a 30-day prison sentence for tax fraud. U.S. District Court Judge Tana Lin handed down the decision, adding a $5,000 fine and 100 hours of community service to Mathew's tab. This news percolated through the legal system today, with U.S. Attorney Tessa M. Gorman announcing the outcome of what is reportedly the first in a series of related cases.
As reported by the U.S. Department of Justice, Mathew's misdemeanor was making and subscribing a false tax return, a behavior he admitted to in his plea agreement. By Judge Lin's account, "Tax fraud is an enormous problem…. It is a serious crime…. There is no excuse for hiding half a million dollars in a life of privilege, except greed." The Judge also dismissed the defense's request for home confinement, stating it would not sufficiently reflect the severity of the offense.
Mathew's case is only a sip of a larger cup, as his brother-in-law, Assad Baragzai, faces his own sentencing come November 18 for failing to report as much as $6 million in income from 2016 to 2020. Assistant United States Attorney Michael Dion, in lobbying for a 4-month prison sentence for Mathew, highlighted the issue of tax evasion, explaining “...most Americans pay their taxes voluntarily and on time – as much as 85%, by IRS estimates. The root of the tax evasion problem is not widespread fraud, but rather a small minority of people and businesses who refuse to pay what they owe." Dion's statement an indictment on those like Mathew who, "simply did not want to pay what he owed."
Before sentencing, Mathew had already provided restitution to the Internal Revenue Service and may still face additional civil penalties, fines, and interest for the tax loss incurred by his fraudulent activity. The punishment Mathew faces hits the top of an iceberg, as filing or subscribing a false tax return could earn one up to three years in prison and a $250,000 fine or twice the gain or loss from the offense. This case and ongoing investigations are in the hands of the IRS-CI, with the prosecution led by Assistant United States Attorney Michael Dion.
