Sunday, July 21, 2024
Hawai'i Free Press

Current Articles | Archives

Thursday, November 22, 2018
Honolulu Tax Evader a Big Deal in Guam, Micronesia
By News Release @ 3:49 PM :: 8196 Views :: National News, Ethics, Law Enforcement, Taxes

Owner Of Engineering Firm And CPA Convicted In Tax Scheme

News Release from US DoJ, November 21, 2018

HONOLULU – A federal jury in Honolulu, Hawaii, convicted Wagdy Guirguis and Michael Higa of conspiracy to defraud the United States yesterday, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney for the District of Hawaii Kenji M. Price. In addition to the conspiracy conviction, Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and one count of witness tampering. Higa was convicted of the conspiracy and one count of aiding and assisting in the preparation of a false tax return for one of Guirguis’ business entities. The convictions arise from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment and income taxes.

“Employers who withhold employment taxes from their employees’ paychecks and choose to pocket those funds violate the trust of their employees and the United States,” said Principal Deputy Assistant Attorney General Zuckerman. “The Department of Justice will continue to identify and prosecute employment tax offenders, ensuring that such businesses and executives are held to account and do not gain an unfair advantage over honest employers who follow the law and pay their fair share.”

“Mr. Guirguis owed the Internal Revenue Service employment taxes and with the help of Mr. Higa, conspired to obstruct the Internal Revenue Service’s attempts to collect the tax by concealing income using a nominee entity and preparing false corporate and individual income tax returns,” said Acting Special Agent in Charge Troy Burrus. “The defendants’ actions to obstruct the Internal Revenue Service’s collection efforts are very serious. IRS–Criminal Investigation will continue to pursue employers, who collect these taxes and use the funds for personal gain.”

According to court documents and evidence presented at trial, Guirguis operated numerous engineering businesses. Higa, a certified public accountant, was the controller of these businesses. Higa also served as a nominee officer of another entity controlled by Guirguis. When the IRS determined Guirguis’ businesses owed over $800,000 in federal employment taxes and assessed a $812,000 penalty, Guirguis and Higa took various steps to place income and assets out of the IRS’ reach. For example, Guirguis and Higa used the nominee entity to fraudulently convey a condominium to Guirguis’ wife. After an IRS revenue officer began questioning Mrs. Guirguis’ sole ownership of this condominium, Guirguis and Higa instructed a bookkeeper to alter the books and records in an attempt to conceal this transaction from the IRS.

From 2001 through 2012, Guirguis and Higa also used the nominee entity to divert approximately $1.3 million from Guirguis’ businesses for Guirguis’ personal use. As a result of their diversion and concealment, Guirguis’ 2010 through 2012 returns omitted $553,000 in income, resulting in a tax deficiency of $165,000. In addition, Guirguis filed corporate income tax returns that fraudulently omitted millions of dollars of gross receipts. For one of his businesses, Guirguis simply did not file a corporate tax return, thereby not reporting more than $1.7 million in gross receipts.

After the IRS levied the bank accounts of one business, Guirguis diverted incoming funds owed to that business, directing payment of the funds to a different business. Guirguis also instructed a tenant to disregard IRS collection notices and pay rent directly to him rather than to the IRS. Moreover, Guirguis made false and misleading statements to IRS revenue officers, all in an effort to obstruct the IRS’ efforts to collect on the taxes he and his companies owed.

To impede the criminal investigation into his tax violations, Guirguis falsely told an employee, who had testified before the grand jury, that he did not know about the false backdating done in the books of the nominee entity, and asked the employee to sign a false statement to that effect.

Guirguis and Higa face a maximum sentence of five years in prison each on the conspiracy counts. Guirguis faces a maximum sentence of five years on each of the tax evasion counts, three years in prison on each of the counts involving false tax returns and corrupt endeavors, and one year in prison for the count of failure to file a tax return, as well as a period of supervised release, restitution, and monetary penalties. Guirguis faces an additional maximum 20 year sentence for witness tampering. In addition to the maximum sentence of five years in prison on the  onspiracy count, Higa faces a maximum sentence of three years on the aiding and assisting the filing of a false tax return count.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Price commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada, who prosecuted the case.


1997: Guam rubbish piling up

2017: Wagdy Guirguis and Guam Power Inc. sued for alleged failure to repay project loan

2018: Businessman convicted of tax fraud has Guam, Micronesia deals


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii