Suppressing Tax Fraud

A clock with tax time sticky note and calculator on the desk.

Deceptive business owners avoid paying taxes in similar ways as unscrupulous individual tax payers. They can under report income, inflate their deductions, claim too many tax credits or hide money through money laundering schemes. The owner of a Chicago-area restaturant famous for its margaritas used a “zapper” or sales suppression device to underreport more than $1 million in taxes through a carefully planned business tax fraud scheme.

Software zappers are illegal software programs that delete records of cash sales transactions. The zapper reconciles the remaining data so the company’s reported sales match the reported income. (They are banned in Illinois, as of 2013.) The Lakeview, Ill., restaurant owner used sales suppression software and related devices to avoid paying monthly sales and use taxes over three years.

The restaurant owner thought the software program would suppress her fraud, so the taxes would flow into her pocket. (She was wrong.) She was eventually charged with defrauding the state out of more than $100,000 in tax revenue. (That totals up to about $3,000 per month that Illinois did not receive because of her tax fraud scheme.)

The 45-year-old restaurant owner from Morton Grove pleaded guilty to possessing an automated sales suppression device and tax fraud. She received a sentence of two years behind bars to be followed by one year of unsupervised release. (Technology may have made it easier to carry out her crime, but now she has to accept the consequences of her criminal actions.)

 Today’s “Fraud of the Day” is based on an article, Owner of Cesar’s Resaurant In Lakeview Pleads Guilty in Tax Fraud Case, Gets 2 Years,” posted on  on October 28, 2019.

CHICAGO (CBS) — An owner of Cesar’s Killer Margaritas restaurant on in Lakeview has pleaded guilty to underreporting more than $1 million in sales, the Illinois Attorney General’s office announced Wednesday.

Sandra Sanchez, 45, of Morton Grove, pleaded guilty before Cook County Criminal Court Judge Michael Obbish to possessing an automated sales suppression device – also called a “tax zapper,” according to the office of Illinois Attorney General Kwame Raoul.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.