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Co-Owner of Nick's Roast Beef Sentenced for Skimming Nearly $6 Million; Wife and Son Also Sentenced
On April 26, 2017, in Boston, Massachusetts, Nicholas Koudanis, of Topsfield, was sentenced to 24 months in prison, two years of supervised release and was ordered to pay restitution of $2,042,366 to the IRS. In January 2017, Koudanis, the co-owner of Nick's Famous Roast Beef in Beverly, pleaded guilty to one count of conspiracy to defraud the United States by obstructing the IRS and 10 counts of aiding and assisting in the filing of false tax returns. His wife, EleniKoudanis was sentenced to one year of probation and ordered to pay the same amount of restitution. She previously pleaded guilty to five counts of aiding and assisting in the filing of false tax returns. The restitution amount consists of the approximately $992,821 in taxes the Koudanises avoided paying, plus interest and penalties. Their son, Steven Koudanis, was sentenced to one year of probation to be served in home confinement and ordered to pay restitution of $151,240 to the IRS. He pleaded guilty to one count of endeavoring to obstruct and impede the due administration of the Internal Revenue Laws. According to court documents, Koudanis, skimmed nearly $6 million in cash receipts from the business over a six-year period and failed to report that cash income on his business or personal tax returns. From 2008 to 2013, the co-owners of Nick's Roast Beef, Nicholas Koudanis and Nicholas Markos, skimmed more than $1 million in cash receipts each year, which they failed to report on either the corporate tax returns or their personal tax returns, thereby avoiding the payment of nearly $1 million each in personal income taxes during that same period. Each week, Koudanis and Markos personally divided the cash receipts, determining how much to deposit to the business's bank account and report on their tax returns, how much to use to pay suppliers and employees, and how much to keep for themselves. EleniKoudanis had primary responsibility for the bookkeeping functions of the restaurant and provided some of the false income information to the tax preparer. Their son, Steven Koudanis, created false cash register receipts that were used in connection with an IRS tax audit of the business. By December 2014, Nicholas and EleniKoudanis amassed more than $1.6 million in cash, which they kept in a safe in their home. In January 2017, Nicholas Markos pleaded guilty and is scheduled to be sentenced.
Reference: https://www.irs.gov/compliance/criminal-investigation/examples-of-corporate-fraud-investigations-fiscal-year-2017
1. Write a 1-paragraph summary of the article. A summary should state, in your own words,the main idea of the article and key facts. A summary is not re-typing part of the article.Remember, use proper APA format.
2. Write 2 - 4 paragraphs about the relevance to the industry of fraud. This is where youanalyze the article. Consider the following:
a. An identification of the key issues posed by the article or case
b. A list of applicable stakeholders and their rights and obligations
c. What choices were/are available and what were/are the costs or trade-offs
d. Comment on how the situation was or should be resolved
e. Who (individual or group) was/will be impacted by this decision?
f. Questions you believe readers should consider about the case that will addsubstance to learning
3. Write a paragraph to express your opinion about the issue. Be sure to back up youropinion. Remember, this is your opinion about the issue, not about how the article iswritten.
4. Provide reference page