(CN) – The owner of several nightclubs in Washington, D.C., was unable to persuade a federal judge to overturn his conviction on tax evasion charges.
Abdul Karim Khanu, the owner of Platinum nightclub and a co-owner of VIP, was convicted of tax evasion in early December. He appealed, but U.S. District Judge Colleen Kollar-Kotelly upheld the conviction, saying it was supported by ample evidence.
The government said Khanu skimmed cash from gross receipts, paid employees in cash and recorded the payments on “white slips” that never made it into the payroll accounting system, helping him avoid paying employment taxes.
The government also presented evidence that Khanu submitted false income tax returns in 2002 and 2003. An IRS agent calculated that Khanu spent more than $3 million in cash in 2003 but reported only $778,000, suggesting that he failed to report more than $2.2 million in earnings, the ruling states.
The judge said the evidence supported the charge that Khanu had been dealing in cash to make it more difficult for the IRS to track his income. In 2003, federal agents stormed Khanu’s house and found $1.9 million stashed in a safe in his mudroom. Khanu also made large cash payments, including $24,000 for fence construction and $36,000 for landscaping, the ruling states.
“It was reasonable for the jury to conclude that defendant, a sophisticated businessman, had knowledge of his legal duty to pay taxes,” Judge Kollar-Kotelly wrote.
The federal court upheld the conviction.