A Michigan man made his initial appearance in court today before U.S. Magistrate Judge Elizabeth A. Stafford of the U.S. District Court for the Eastern District of Michigan on an indictment that charged him with filing false tax returns and not paying employment taxes for his company’s employees.
According to the indictment, which was unsealed on June 4, from 2017 to 2020, Ali Kassem Kain, of Northville, operated a transportation business that arranged for automobiles to be shipped abroad. For tax years 2017 through 2020, Kain allegedly underreported the business’ gross receipts by several million dollars each year on the business’ corporate returns. For those same years, he also underreported the amount of income he earned from his business on his personal returns.
In addition, Kain was allegedly responsible for withholding Social Security, Medicare and federal income taxes from his employees’ wages and paying those amounts over to the IRS. Instead, Kain allegedly did not collect all these taxes for his company’s employees and did not pay over the full amount due to the IRS.
In total, Kain is alleged to have caused a tax loss to the IRS of nearly $5 million.
Kain was charged with 15 counts of failing to collect and pay over employment taxes and eight counts of filing false tax returns. If convicted, Kain faces a maximum penalty of five years in prison for each employment tax count and a maximum penalty of three years in prison for each count of filing a false tax return. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Dawn N. Ison for the Eastern District of Michigan made the announcement.
IRS Criminal Investigation and the FBI Detroit Field Office are investigating the case.
Senior Litigation Counsel Corey Smith and Trial Attorney Richard Kelley of the Tax Division and Assistant U.S. Attorney Jerome Gorgon for the Eastern District of Michigan are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.