The California Board of Equalization (BOE) estimates that the state is owed $461 million by folks and corporations that didn’t pay sales and use taxes they collected from customers. Every quarter, the agency publishes a list of the top 500 offenders to shame them into complying with the law.
It isn’t very effective.
Since the shaming program’s inception in 2007, the state has collected $14.35 million from 188 taxpayers who fessed up and agreed to pay immediately or on an installment plan.
By law, the board is required to shame the 500 by publishing their names, addresses, lien dates and amounts due on its website four times a year. There is also an interactive map for identifying clusters of scofflaws.
Some of the liens go back more than a decade and there is no indication on the BOE website what the status of the scofflaw is these days.
No. 1 on the list is M & Y Safar Brothers, Inc. in the city of Carson, doing business as Lomita Mobil. The company, which operated mini-market gas stations, is on the hook for $6.39 million. Its first lien date goes back to September 2010, and BOE audits back to 2003 (pdf) questioned the company’s business practices.
Holding down the No. 2 spot is Fariborz Tavassol Kashani. The former used-car dealer owes $5.28 million, with a lien back to January 2004. Third on the list is the privately held Beverly Hills Frontline Imports Inc., with a lien for $5.22 million dating back to 2003. Kashani is listed as the Frontline president.
Iranian used-car dealer Yousef Hoodneh of San Diego, at $4.84 million, is deadbeat No. 4. He also shows up on the list as Flamingo Motors Inc., the company he owned when he pleaded guilty in 2010 to 13 counts of tax fraud and one count of grand theft for understating his 2003 and 2004 corporate income by $6.5 million. He did not go to prison. Hoodneh was sentenced to five years probation and given credit for serving one year in jail. The tax debt is still on the books.
In the No. 5 hole is Lyon’s of California, Inc., the former operator of a chain of diner-style restaurants by that name. The company, headquartered in Sacramento, went through multiple iterations of ownership through its tumultuous history, suffered a bankruptcy and finally closed its last restaurant in 2012.
Richard W.P. Sang, who holds down the No. 6 spot, shares a lien address with Lyon’s of California. The former owner of Mallard’s restaurant in Stockton and a handful of others owe $4.03 million. Blogger Joe Goldeen corresponded with Sang while he was in San Joaquin County Jail in 2008, awaiting trial on almost three-dozen criminal fraud charges. Sang wrote:
“You as a writer should check out every detail; at the very least wonder how can some one coming out of a Fed Pen in 1994 with $20, build an empire of restaurants in less than seven years (with) sales in excess of $200 million and see it all collapse because of credit card factoring loans and impossibly high interest loans from gentlemen’s loan sharks.”
Sang was in prison because of a 1991 guilty plea in federal court to fraud charges stemming from his management of restaurants in the Northwest. He was sentenced to 46 months in federal prison for that.