La Shish owner accused by feds of evading taxes

U.S.: LA SHISH BOSSES EVADED TAXES
Subhead:	COUPLE SCHEMED TO WITHHOLD MILLIONS, INDICTMENT ALLEGES
Byline/Affiliation:	By NIRAJ WARIKOO FREE PRESS STAFF WRITER
	5/19/2006

The operators of the La Shish chain of restaurants are accused of scheming to cheat the U.S. government of millions of dollars by skimming money to avoid paying taxes, according to an indictment unsealed Thursday.

The U.S. Attorney’s Office in Detroit has charged La Shish’s owner, Talal Chahine, and his wife, Elfat El Aouar, with four counts of tax evasion.

El Aouar, the company’s financial manager, was arrested at her Plymouth home Thursday morning.

She later pleaded not guilty in U.S. District Court in Detroit while Chahine remains in his native country, Lebanon, with a warrant out for his arrest.

According to prosecutors, Chahine, 51, of Dearborn Heights and El Aouar, 39, of Plymouth operated a double set of computerized books and records – one real and one fake – to deceive the IRS.

They concealed more than $16 million in cash received by the restaurants, converted it into cashier’s checks and larger bills, and then took it to Lebanon, the indictment alleges.

“The transferring of millions of dollars in cash from the United States to the Middle East in the attempt to evade taxes will not be tolerated,” said Stephen Murphy, U.S. attorney for the Eastern District of Michigan.

But Chahine’s attorney, Robert Forrest, said: “I think the government has acted prematurely. We were working to resolve the matter with them.”

Wearing blue jeans and a headscarf, El Aouar appeared in court Thursday before U.S. Magistrate Judge Donald Scheer.

Assistant U.S. Attorney Kenneth Chadwell suggested that she was a flight risk and asked the court to order her to hand over the passports for her and her children and any plane tickets. No bond was set during her appearance Thursday.

“She is a Lebanese citizen and can flee there,” Chadwell said. The court set a hearing today for El Aouar, who remains in the Wayne County Jail.

After the hearing Thursday, her attorney James Thomas said: “These are just allegations.”

Each of the four counts carries a maximum penalty of 5 years in prison and a $250,000 fine, upon conviction.

Local prosecutors can’t arrest Chahine because he is in Lebanon and the United States and Lebanon don’t have an extradition agreement, Chadwell said.

His attorney, Forrest, said he wouldn’t comment on Chahine’s whereabouts.

La Shish, headquartered in Dearborn, has 14 locations across southeastern Michigan and has become one of the most popular Middle Eastern restaurants in the region.

According to the indictment, Chahine, with help from El Aouar, understated his income to the IRS by about $4.1 million in 2000, $4.6 million in 2001, $4.7 million in 2002, and $1.6 million in 2003.

In total, they cheated the government out of about $5.5 million over the four years, according to the U.S. Attorney’s Office.

The investigation was conducted by FBI and IRS agents. In September, federal agents raided Chahine’s homes, netting computers, hard drives, cell phones, and computer discs, according to federal search warrant records.

Contact NIRAJ WARIKOO at 248-351-2998 or nwarikoo@freepress.com.

(SIDEBAR)

KEY DATES IN CASE

April 19, 2005

Federal agents raid the homes of Talal Chahine in Plymouth Township and Dearborn Heights, and at La Shish’s headquarters in Dearborn. They get computers and financial records, according to search warrant records.

Sept. 29, 2005

Federal agents again raid the homes of Talal Chahine in Plymouth and Dearborn Heights.

May 13, 2006

Khalil Chahine, 23, son of Talal Chahine, is sentenced to 20 to 30 years in prison for the shooting death of his ex-girlfriend’s fiance, Paul Hallis.

May 18, 2006

Chahine’s wife, Elfat El Aouar, is arrested at her home in Plymouth. She and Talal Chahine are each charged with four counts of tax evasion in an indictment that is unsealed. She pleads not guilty in U.S. District Court. A warrant is issued for Chahine, who is in Lebanon, prosecutors say.

SOURCE: Free Press research

– Niraj Warikoo