DETROIT (WWJ/AP) – A jury says the founder of Michigan-based Happy’s Pizza was withholding too much dough from the IRS.
Happy Asker was convicted Wednesday of conspiracy and 32 counts of tax crimes in a scheme to conceal millions of dollars in income from the pizza chain.
The scheme allegedly ran from 2004 through 2011. According to the government, Asker and the others under-reported taxable income and payroll taxes “for nearly all 60 Happy’s Pizza franchise restaurants located in Michigan, Ohio and Illinois.”
Evidence admitted at trial established that from 2008 to 2010, more than $6.1 million in cash was diverted from approximately 35 different Happy’s Pizza stores in the Detroit area, Illinois and Ohio.
The government says a portion of the unreported income was shared among franchise owners, including Asker, in a weekly cash “profit split.” The rest of the money was distributed among the investors and managers of the relevant franchises.
The Internal Revenue Service says more than $6.2 million in taxes is owed as a result of this fraud scheme.
Asker had dismissed the allegations as “baseless” when he was indicted in 2013. He’s due back in court for sentencing on March 5.
In a statement issued to WWJ Thursday morning, Asker said he was “surprised and disappointed” by the verdict.
“Although we respect the decision of the jury, we will consider options for an appeal and will pursue those options over the next few months,” the statement read. “The indictment did not include Happy’s Pizza Franchise LLC and involved only a handful of our 100 franchise locations. We have made the changes necessary to ensure a similar situation never occurs again within our company.”
Asker’s convictions include three counts of filing false federal individual tax returns for the years 2006 through 2008, 28 counts of aiding and assisting the filing of false federal income and payroll tax returns for several Happy’s Pizza Franchises restaurants for the years 2006 through 2009, and one count of engaging in a corrupt endeavor to obstruct and impede the administration of the Internal Revenue Code.
Four other defendants in the case pleaded guilty prior to Asker’s trial.
Maher Bashi, who served as Happy’s Pizza’s corporate chief operating officer, and Tom Yaldo, an owner of numerous Happy’s Pizza franchises, pleaded guilty in October to conspiracy to defraud the United States.
In July, Arkan Summa, an owner of numerous Happy’s Pizza franchises, pleaded guilty to engaging in a corrupt endeavor to obstruct and impede the due administration of the IRS, and Tagrid Summa, another Happy’s Pizza franchise owner, pleaded guilty to providing false documents to the IRS.
The Farmington Hills-based pizza company says it has 100 locations in Michigan and other states.
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