Date: Dec. 19, 2024 Contact: newsroom@ci.irs.gov SEATTLE — The owner of a string of bikini barista coffee stands was sentenced today in U.S. District Court in Seattle to 10 months in prison and a $75,000 fine for making and subscribing a false tax return, announced U.S. Attorney Tessa M. Gorman. Between 2016 and 2020 Assad Baragzai of Yarrow Point, Washington, failed to report as much as $6 million in income on his tax returns. At the sentencing hearing U.S. District Judge Tana Lin said, the tax system “is an honor system… and you weren’t honorable. (There was) absolutely no reason for you to be cheating on your taxes except for pure greed.” “Our government relies on the 85 percent of Americans who each year pay the taxes they owe to keep communities safe, and provide all the other important services we need,” said U.S. Attorney Tessa M. Gorman. “Mr. Baragzai had great business success, but failed to fund the community that made that success possible. Such conduct is not erased by paying what is owed some five years later – it is appropriate that he serve prison time for his willful tax fraud.” According to records in the case, Baragzai significantly under-reported his income when he provided information to his tax accountant. The government believes that the tax loss over the five years that Baragzai underreported his income is more than $1.7 million. The tax loss in 2017 alone is more than $687,000. Baragzai disputes the government figures and argued that he had some legitimate deductions making the tax loss is $1.3 million. Judge Lin determined the tax loss was $1,348, 154. In asking for a two-year prison term Assistant United States Attorney Mike Dion wrote to the court, “Assad Baragzai reaped the benefits of American society but somehow convinced himself that he did not need to pay his share of the costs that support that society. All Americans pay a price for this kind of selfishness. For example, school lunches are provided by the United States Department of Agriculture’s Food and Nutrition Service. But for this prosecution, Baragzai’s tax fraud would have cost the government the equivalent of 462,000 school lunches.” “Instead of paying his fair share toward public resources as every law-abiding American does, Mr. Baragzai misrepresented his income to furnish an already-lavish lifestyle,” said Adam Jobes, Special Agent in Charge of IRS Criminal Investigation (IRS-CI) Seattle Field Office. Baragzai is the second defendant to be sentenced in this investigation. In October 2024, Baragzai’s brother-in-law, Rajesh Mathew, of Auburn, Washington, was sentenced to 30 days in jail, a $5,000 fine, and 100 hours of community service for making and subscribing a false tax return. Baragzai has agreed to pay restitution to the IRS. He may also face additional civil penalties, fines, and interest for the tax loss. The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Michael Dion. IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
