The owner of a series of bikini barista coffee stands has been sentenced to 10 months in prison and fined $75,000 for filing a false tax return. U.S. Attorney Tessa M. Gorman announced the sentencing of Assad Baragzai, 47, from Yarrow Point, Washington, in U.S. District Court in Seattle. Between 2016 and 2020, Baragzai failed to report up to $6 million in income on his tax returns.
At the sentencing hearing, U.S. District Judge Tana Lin stated that the tax system "is an honor system… and you weren’t honorable," adding there was "absolutely no reason for you to be cheating on your taxes except for pure greed."
"Our government relies on the 85 percent of Americans who each year pay the taxes they owe to keep communities safe and provide all the other important services we need," said U.S. Attorney Gorman. "Mr. Baragzai had great business success but failed to fund the community that made that success possible."
Court records indicate that Baragzai under-reported his income significantly when providing information to his tax accountant. The government estimates a tax loss exceeding $1.7 million over five years, with more than $687,000 lost in 2017 alone. Baragzai disputes these figures, claiming legitimate deductions reduce the loss to $1.3 million; however, Judge Lin determined it at $1,348,154.
Assistant United States Attorney Mike Dion requested a two-year prison term and noted that Baragzai "reaped the benefits of American society" but believed he did not need to contribute his share of costs supporting it.
Adam Jobes, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office commented on Baragzai's actions: "Instead of paying his fair share toward public resources as every law-abiding American does, Mr. Baragzai misrepresented his income to furnish an already-lavish lifestyle."
Baragzai is not the first defendant sentenced in this investigation; his brother-in-law Rajesh Mathew received a sentence in October 2024 for similar charges.
Baragzai has agreed to pay restitution to the IRS and may face additional civil penalties.
The Internal Revenue Service Criminal Investigation (IRS-CI) is investigating this case with prosecution by Assistant United States Attorney Michael Dion.