City Paper is not for tourists
Abdul Karim Khanu, the owner of controversial-now-defunct District nightclubs, had been indicted in U.S. District Court on conspiracy and tax evasion charges. Khanu, who currently resides in the sweet Potomac suburb, operated DC Live, Platinum and other night clubs. In late 1999, his company Abdul Productions II, Inc. he opened Platinum. Under a haze of allegations, Platinum closed in June 2008. Khanu also owned H20 on the Southwest waterfront which closed this month.
Now, it appears Khanu is in some very hot water with federal authorities. I think you can read the complaint here.
A U.S. Attorney’s Office press release states:
“A federal grand jury sitting in Washington, D.C., has returned a twenty-two count indictment, charging a local nightclub owner and operator, Abdul Karim Khanu, with tax crimes associated with two nightclubs that he ran from 2000 through 2003, U.S. Attorney Jeffrey A. Taylor, John A. DiCicco, Acting Assistant Attorney General for the Tax Division, U.S. Department of Justice, and C. André Martin, Special Agent in Charge, Criminal Investigation, IRS, Washington Field Office, announced today.
Khanu, 41, of Potomac, Maryland, was charged with one count of conspiring to defraud the United States with the three co-owners of one of the clubs that he ran from 2000 through 2003, three counts of attempted tax evasion, and eighteen counts of aiding and assisting in the preparation and filing of false tax returns. Khanu was most recently the owner of H2O, a nightclub at 800 Water Street, SW, Washington, D.C., until it was closed in March of this year.
Khanu was arrested this morning by IRS Special Agents and is scheduled to be arraigned on the charges in U.S. District Court this afternoon.”
The complaint states:
From in or about 1998 continuing through at least in or about September 2004, in the District of Columbia and elsewhere, defendant ABDUL KARIM KHANU, SM, TH, AL, and others known and unknown to the grand jury, did unlawfully, voluntarily, intentionally, and knowingly conspire, combine, confederate, and agree together and with each other to defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful government functions of the IRS of the U.S. Treasury Department in the ascertainment, computation, assessment, and collection of the revenue, to wit, income and employment taxes.”
Abdul is accused of skimming profits and paying employees in cash to avoid taxes:
“It was an object of the conspiracy to skim cash from TAF, Inc.’s gross receipts so that the conspirators could pay the corporation’s employees wages in cash, avoid paying employment taxes on those wages, and assist the employees in avoiding paying their income It was a further object of the conspiracy to skim cash from TAF, Inc.’s gross receipts so that KHANU, SM, TH, and AL could conceal their income and avoid paying income taxes.”
But wait, there’s more.
“It was a further part of the conspiracy that KHANU would and did conceal the skimmed cash that he received by depositing skimmed cash into TAF, Inc.’s bank accounts and improperly recording the deposits in TAF, Inc.’s books and records as loans from him, or loan repayments by him, rather that accurately recording these cash deposits as the corporation’s sales receipts. Accordingly, KHANU was able to hide his skim and access the skimmed funds in non-cash form by having TAF, Inc. repay the purported loans or by borrowing the funds before making the purported loan repayments.”