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ALBANY, N.Y. -- Owners of USA Gas convenience store chain in Schenectady, N.Y. were found guilty of violating numerous tax codes in a federal court last week, according to the Business Review.
The jury found Ziya Ozbay, 59, and Yalcin Ozbay, 38, guilty of obstruction and impeding the IRS, failing to pay employee withholding taxes, failing to file income tax returns for five years and structuring tax deposits to avoid reporting transactions to the IRS. Both are scheduled to be sentenced on March 6 by U.S. District Court Judge Gary L. Sharpe, and could face up to 10 years in prison, the report stated.
Yalcin Ozbay was also found guilty of subscribing to a false return for failing to report more than $400,000 in revenue earned by the company in 2002, according to the report.
Two additional defendants, Mustafa Ozbay, 56, and Birol Ozbay, 29, pleased guilty on the charges on Nov. 2 during the trial, according to the Business Review.
Problems started for USA Gas when accusations were made that the defendants failed to maintain corporate books and records, filed inaccurate corporate and personal income tax returns and failed to pay federal withholding taxes for employees at the station in Schenectady, N.Y.
The company reportedly made $17 million in cash deposits alone in bank accounts between October 1999 and July 2003. However, all but three of the business' hundreds of bank deposits were made in amounts below $10,000 -- the threshold at which banks have to report deposits to the federal governments, according to court records cited by The Post-Star. According to a case statement filed by the U.S. attorney's office against the company's owners, 81 percent of those deposits were for amounts between $9,000 and $9,995.
Despite the millions of dollars flowing through their bank accounts, the Ozbays filed returns with income levels so low they had no taxable income, according to federal court documents obtained by The Post-Star. Yalcin Ozbay's corporate tax return in 2002 for U.S. Mart Inc. was singled out since he claimed $16,081 in income, while prosecutors believed the company had $400,000 in revenues during November and December of that year alone, the newspaper reported.
The government also sought to seize six bank accounts containing $275,616 and four 2003 Mercedes Benz automobiles, according to court records. In addition, $80,000 was from Yalcin Ozbay's Mercedes Benz the day of his arrest.