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Former Plaza Extra Controller Pleads Guilty to Fraud

June 9, 2004 – A former controller and accountant for Plaza Extra Supermarkets has pleaded guilty to charges of mail fraud in connection with the reporting of income for tax purposes of the enterprise and its owner, Fathi Yusuf.
U.S. Attorney David Nissman last September announced federal grand jury indictments of Yusuf, one of his sons and three other individuals on charges of money laundering, wire fraud and tax evasion allegedly involving some $60 million. (See "Bail Denied for Fathi Yusuf and One Associate".)
In connection with those indictments, Nissman announced on Wednesday afternoon that John Benson Irvin IV has entered guilty pleas to charges of mail fraud and aiding and abetting the filing of a false individual income-tax return.
According to the criminal information and plea agreement filed in District Court on St. Thomas, Irvin, who no longer resides in the territory, maintained the corporate books and records. He was responsible for filing gross receipts tax returns with the Internal Revenue Bureau and providing financial information to an outside accountant for Plaza Extra's corporate income-tax returns, the documents state.
"During Irvin's tenure, substantial sales receipts were not deposited into Plaza Extra's bank accounts," a release issued Wednesday from the U.S. Attorney's Office stated. "At the direction of Plaza Extra's management, Irvin did not report the undeposited sales on the gross receipts tax returns … and provided the false sales information to Plaza Extra's outside accountant" for use in the preparation of the enterprise's corporate income-tax returns.
"Because Plaza Extra's income flowed through to the owner's individual income-tax returns, the income on owner Fathi Yusuf's 2000 income-tax return was substantially understated," the release said. "According to the plea agreement, the tax loss to the Virgin Islands was more than $10 million."
The September indictment charged that in a money-laundering and tax-evasion scheme, the co-conspirators kept cash from daily receipts at the Plaza Extra stores and later directed operatives to take the cash in increments of less than $10,000 to local banks and purchase cashiers' checks, travelers' checks and money orders. These instruments, along with large sums of cash, were then deposited in banks in St. Martin and later sent to the Cairo Amman Bank in Amman, Jordan, the indictment charged.
Yusuf, his son and two associates pleaded not guilty to all counts in District Court. An arrest warrant was issued for a fifth man named in the indictment, who was said by authorities to reside in St. Martin, and who was charged with money-laundering.
Wednesday's release stated that the case against Irvin was investigated by the FBI and the federal Internal Revenue Service and prosecuted by the local U.S. Attorney's Office and the U.S. Justice Department's Tax and Criminal Division. The mail fraud charge carries a maximum penalty of five years in prison and a $250,000 fine, and that the income-tax charge carries a maximum of three years in prison and a $100,000 fine.

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June 9, 2004 - A former controller and accountant for Plaza Extra Supermarkets has pleaded guilty to charges of mail fraud in connection with the reporting of income for tax purposes of the enterprise and its owner, Fathi Yusuf.
U.S. Attorney David Nissman last September announced federal grand jury indictments of Yusuf, one of his sons and three other individuals on charges of money laundering, wire fraud and tax evasion allegedly involving some $60 million. (See "Bail Denied for Fathi Yusuf and One Associate".)
In connection with those indictments, Nissman announced on Wednesday afternoon that John Benson Irvin IV has entered guilty pleas to charges of mail fraud and aiding and abetting the filing of a false individual income-tax return.
According to the criminal information and plea agreement filed in District Court on St. Thomas, Irvin, who no longer resides in the territory, maintained the corporate books and records. He was responsible for filing gross receipts tax returns with the Internal Revenue Bureau and providing financial information to an outside accountant for Plaza Extra's corporate income-tax returns, the documents state.
"During Irvin's tenure, substantial sales receipts were not deposited into Plaza Extra's bank accounts," a release issued Wednesday from the U.S. Attorney's Office stated. "At the direction of Plaza Extra's management, Irvin did not report the undeposited sales on the gross receipts tax returns ... and provided the false sales information to Plaza Extra's outside accountant" for use in the preparation of the enterprise's corporate income-tax returns.
"Because Plaza Extra's income flowed through to the owner's individual income-tax returns, the income on owner Fathi Yusuf's 2000 income-tax return was substantially understated," the release said. "According to the plea agreement, the tax loss to the Virgin Islands was more than $10 million."
The September indictment charged that in a money-laundering and tax-evasion scheme, the co-conspirators kept cash from daily receipts at the Plaza Extra stores and later directed operatives to take the cash in increments of less than $10,000 to local banks and purchase cashiers' checks, travelers' checks and money orders. These instruments, along with large sums of cash, were then deposited in banks in St. Martin and later sent to the Cairo Amman Bank in Amman, Jordan, the indictment charged.
Yusuf, his son and two associates pleaded not guilty to all counts in District Court. An arrest warrant was issued for a fifth man named in the indictment, who was said by authorities to reside in St. Martin, and who was charged with money-laundering.
Wednesday's release stated that the case against Irvin was investigated by the FBI and the federal Internal Revenue Service and prosecuted by the local U.S. Attorney's Office and the U.S. Justice Department's Tax and Criminal Division. The mail fraud charge carries a maximum penalty of five years in prison and a $250,000 fine, and that the income-tax charge carries a maximum of three years in prison and a $100,000 fine.

Back Talk


Share your reaction to this news with other Source readers. Please include headline, your name, and the city and state/country or island where you reside.

Publisher's note : Like the St. Thomas Source now? Find out how you can love us twice as much -- and show your support for the islands' free and independent news voice ... click here.