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Grocery Owner Sentenced to Twelve Months on Tax Crimes

Tuesday, August 26, 2008
Stephen B. Cohen was sentenced as a result of his failure to collect and pay over $500,000 of payroll and sales taxes.

(Washington, DC) - Stephen B. Cohen of Washington, DC was sentenced today to twelve months-and-day imprisonment for tax crimes involving his willful failure to collect and pay over $500,000 of payroll and sales taxes, the Justice Department announced. Cohen, a one-time lawyer, owned several businesses in the DC area, including Washington Park Gourmet, a delicatessen and grocery store.

Cohen had pleaded guilty to these offenses on March 10, 2008.  According to a plea agreement, from June 1997 through December 2003, Cohen withheld payroll taxes from his employees' paychecks but failed to pay over those taxes to the Internal Revenue Service (IRS). He also owned Western Market, a grocery store in Bethesda, Maryland. He pleaded guilty to withholding payroll taxes from his Western Market employees' paychecks for 16 years while failing to pay over those taxes to the IRS as well. He also failed to pay sales taxes owed to the DC government. In addition, Cohen had failed to timely file his federal individual income tax returns for tax years 1996 through 2006 and, despite residency in the District of Columbia, failed to file DC income tax returns for 2003 to the present.

According to documents filed with the court, the tax loss - including federal and District of Columbia taxes - is approximately $580,000.

In sentencing the defendant, Chief Judge Royce C. Lamberth noted that the conduct was a serious offense and stated that imprisonment was necessary for a deterrent effect.  Judge Lamberth also sentenced Cohen to three years of supervised release following Cohen's release from prison. In addition, the Court ordered Cohen to pay restitution in the amount of $586,584 to the IRS and DC Office of Tax and Revenue.  Since pleading guilty, Cohen has paid back approximately $360,000 of that amount to the IRS and local tax authorities.