Six Illinois gas station owners have been indicted on charges of pocketing sales taxes customers paid when they fueled up.
The fraud investigation has recovered nearly $13 million in unpaid sales taxes, according to the Illinois attorney general’s office and state department of revenue. The indictments were the first in an ongoing probe of businesses that fail to pay taxes, Atty. Gen. Lisa Madigan said Thursday. More charges against other tax frauds are expected in coming months, she said.
Station owners underreported the amount of gasoline and other goods they sold so they could pay less sales tax, authorities said. They “pocketed tens of millions of dollars that should be going to the state,” Madigan said. “Tax evaders — those who have broken the law — will not be tolerated,” she said.
The indictments should send a message, said John Chambers, chief of criminal investigation for the state revenue department. “We intend to pursue every case that we’ve uncovered and make sure Illinois businesses pay every penny of the sales tax they have collected from their customers.”
An investigation that began in 2008 has collected $12.7 million from 66 gas station owners across the state.
Much of that was collected through a “voluntary disclosure compliance” program begun in October 2009. It gave owners the chance to file amended tax returns and pay money they owed. That was not a so-called amnesty — or forgiveness — program, and participating station owners still could face criminal charges, Madigan said.
Officials said the investigation began as a result of an anonymous complaint. They are continuing to look into whether there is something systemic in the gas-station industry that encourages tax cheats.
Charged in the initial round of indictments were:
– Muzaffar Jameel, 47, of Harwood Heights, who operates two gas stations. One is a Mobil at 4000 N. Western Ave. in Chicago. The other is a Phillips 66 at 6001 W. 35th Ave. in Cicero. He was charged with 14 countes of sales tax fraud for the period November 2007 to December 2008.
– Joy Chemmachel, 47, of Skokie, who operates three stations: Hickory Hills Gas Depot, 8801 W. 87th St. in Hickory Hills; Dempster and Ozarth Shell at 7736 W. Dempster St. in Morton Grove, and Fullerton and Pulaski Shell at 3959 W. Fullerton Ave. in Chicago. She was charged with 19 counts of sales tax fraud for the period November 2007 to May 2009.
– John Kottoor, 54, of Orland Park, and Joy Matthew Kottoor, 58, of Morton Grove. They operate Stickney Shell at 3901 S. Harlem Ave. Each was charged with 10 countes of sales tax fraud for the period November 2007 to September 2008.
– Abdelmomen Abdallah, 33, of Peoria, who operates Road Runner at 2412 N. Sheridan Rd. in Peoria. He was charged with 16 counts of sales tax fraud for the period November 2007 through February 2009.
– Dineshbhai Patel, 57, of Morton, who operates Shell at 2009 S. Main St. in Morton. He is charged with 16 counts of sales tax fraud for the period July 2007 through October 2009.
Those charged could not immediately be reached for comment. Each count of sales tax fraud can carry a prison sentence of two to five years.