DULUTH, Minn. – A man from Duluth pleaded guilty today to tax evasion for failing to report his business income and income to the IRS, Interim US Attorney W. Anders Folk said.
According to court documents, between June 2019 and April 2020, Shimon Shaked, 57, owned and operated several t-shirt and souvenir shops in the tourist area of Canal Park in Duluth, including I Love Duluth, I Love Duluth 2, Up North-The Good Life, and Lake Life (the “Duluth Stores”). Shaked operated the Duluth Stores as part of a holding company called ALMS18, LLC, which he formed in 2012. Although Shaked owns, operates and controls ALMS18, LLC, he registered his teenage daughter as the nominal owner in order to hide and evade income taxes. he received from the business. In 2017, Shaked opened I Love Marquette, another souvenir store located in Marquette, Michigan, operated under the company SkyMqt, LLC.
According to his guilty plea, Shaked evaded tax assessment on the income he earned at his Duluth and Michigan stores by failing to report all income and income to the IRS. Specifically, Shaked reported credit card sales for his stores, but failed to report or pay taxes on most cash sales. To further disguise his income, Shaked used the money from unreported cash sales to pay for his personal expenses and to pay his employees overtime in cash. In doing so, Shaked failed to report and pay the IRS all or part of the required federal payroll taxes due and owed for these employees. In total, Shaked avoided paying around $ 620,362 in taxes.
Shaked pleaded guilty earlier today before U.S. District Chief Justice John R. Tunheim. A sentencing hearing is scheduled for February 15, 2022.
This case is the result of an investigation by the Criminal Investigation Division of the IRS.
US Assistant Prosecutors Joseph H. Thompson and Angela M. Munoz are continuing the case.