November 18, 2016
Southern California 'Subway' Owner Sentenced for Sales Tax Evasion; Ordered to Pay $3 Million
Sacramento – The California State Board of Equalization (BOE) announced this week that Ajay Beri, restauranteur, was sentenced in Orange County Superior Court on November 1, 2016, to nine months confinement and three years formal probation.
Beri pled guilty to felony sales tax evasion and agreed to pay $3,021,059 in restitution to the state. Beri paid $1,250,000 on the day of the sentencing and agreed to pay the remaining balance of $1,771,059 within 18 months.
Beri, 45, of Buena Park, was the owner and operator of co-defendants Ajay Beri Corporation and Beri Restaurants Group, Incorporated. Beri and his wife operated Subway restaurants located throughout Orange and Los Angeles counties since 1998.
The BOE's investigation revealed that Beri collected sales tax from customers on the sale of food at Subway restaurants and knowingly filed fraudulent sales tax returns to the BOE to reduce his sales tax liability. As a result of the evasion scheme, Beri failed to report to the BOE more than $3 million in sales taxes collected.
The California Attorney General's Office prosecuted this case.
The five-member California State Board of Equalization (BOE) is a publicly elected tax board. The BOE collects $60.5 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees, visit the California Tax Service Center.
Note: This news release may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice under Revenue and Taxation Code section 6596. Changes in law or regulations may have occurred since the time this news release was written. If there is a conflict between the text of this news release and the law, decisions will be based upon the law and not this news release. For specific help, please contact the BOE at 1-800-400-7115.