A fast-food franchise owner from New Jersey has copped to concocting a multimillion-dollar tax fraud scheme, according to court documents and the U.S. Department of Justice. Ali Shahid Butt, a 56-year-old resident of Princeton Junction, admitted to his role in a conspiracy that involved failing to cough up more than $2.4 million in taxes to the IRS.
The scheme, unfolding from 2015 through 2021, involved paying employees under the table—many of whom were undocumented workers—in several restaurants owned by Butt across the Midwest and Mid-Atlantic states. Having pleaded guilty to charges brought forward on August 11, according to the U.S. Department of Justice, Butt is now obliged to pay the hefty sum in restitution.
In a narrative that seems more suited for a crime drama than the service industry, Butt and his co-conspirators, including Bahadar "Sam" Durrani, meticulously orchestrated cash payments to dozens of employees—side-stepping the legal requirement to report and pay over payroll taxes. Durrani, sharing the conspiracy spotlight with Butt, has also pleaded guilty and is waiting for his sentencing to come in October.
Details about the case reveal that while Butt partially owned and oversaw operations for several eateries, it was the relationship he harbored with the restaurant franchisor that granted him the leverage needed to conduct these illegal activities. The IRS, along with Homeland Security Investigations, unveiled how Butt and partners, having been charged with a bill of information, are responsible for a tax loss exceeding $1.2 million across multiple locations, including some in Zanesville. Their crackdown not only highlights financial crimes but also the shadow economies in which undocumented workers are exploited for their labor.
Announcements from United States Attorney Dominick S. Gerace II, IRS-CI Special Agent in Charge Karen Wingerd, and Acting Special Agent in Charge Jared Murphey of ICE’s HSI Detroit were stern reminders that the government is dogged in its pursuit of those who attempt to cheat the tax system. Assistant United States Attorney David J. Twombly is representing the U.S. in what amounts to a cautionary tale for business owners playing fast and loose with tax laws.
