An Alexandria couple pleaded guilty to conspiracy in relation to filing false tax claims for their Maryland-based auto body repair shop, and have been ordered to pay $2.2 million in restitution.
Ercin Kalender, 60, and Lizette Kalender, 44, own Butch’s Auto Body in Capital Heights, and were ordered to pay the $2.2 million as part of their plea agreement, according to an announcement from the U.S. Department of Justice.
Between 2015 and 2018, the Kalenders kept two sets of books — one set with actual revenues, and another with lower reports of taxable income that were sent to the Internal Revenue Service.
“The corresponding tax loss to the IRS for the four years was $2,219,602,” DOJ said in a release.
The couple, who were trying to sell the shop in 2018, were busted in a sting operation in 2018. An undercover federal agent posed as a potential buyer and both Ercin and Lizette Kalender revealed a longstanding practice of underreporting revenue and income.
“Further, Ercin explained that while Butch’s filed tax returns showed $2.2 million in gross receipts, the actual gross receipts were closer to $3.1, $4.2, and $3.9 million for the fiscal years for 2015, 2016, and 2017; respectively,” according to DOJ. “Ercin also informed the agent that Lizette also reported sizable W-2 income, which helped them evade scrutiny by the IRS… In 2019, after the Kalenders became aware of the IRS’s investigation, Butch’s reported gross receipts of more than $4.5 million, an increase of more than $2.2 million over the fiscal year 2018,”
Additionally, the couple paid a portion of their employees in cash and falsely reported wages to the IRS.
“In a conversation with the undercover agent, Ercin stated that he paid all his employees’ extra compensation in cash to avoid tax obligations except for one secretary who was not paid under the table,” DOJ reported.
The couple go to court for sentencing on May 26 and face a maximum sentence of five years in prison and three years of supervised release.
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