Suwanee man one of three indicted for tax and immigration fraud

ATLANTA - A Suwanee man, residing in the country illegally, was among three businessmen indicted Friday on federal tax and immigration fraud charges.

Rafael Villereal, Sr., 41, of Suwanee, Rhett Maughon, 48, of Decatur and Marcus Maughon, 46, of Powder Springs operated a business called Atlanta Food Authority, doing business as Atlanta Meat Company, which supplied meat products to restaurants across the Southeast.

The three are accused of filing fraudulent corporate and individual tax returns that failed to state cash wages paid to themselves and their employees. In addition, federal authorities said the three induced illegal aliens to reside in the United States unlawfully by employing them and paying them wages in cash.

Both Rhett Maughon and Marcus Maughon were each released on a $25,000 personal recognizance bond. Villareal was detained by United States Magistrate Judge Russell L. Vineyard after it was established that he is residing illegally in the United States.

"These defendants allegedly paid cash to themselves and to their illegal alien employees and did not report the cash wages to the IRS," said United States Attorney Sally Quillian Yates. "By doing so, not only did the defendants violate federal tax laws, but they also violated immigration laws by encouraging and making it more possible for illegal aliens to have the financial means to continue to live illegally in the United States."

According to the indictment, employees at Atlanta Meat Company were told when they were hired that they would receive a certain amount as "take home pay." Most employees were paid that amount partly in cash and partly by check. Some employees were paid entirely in cash. The defendants and one of the other owners then divided the remaining cash equally among themselves.

The indictment also charged that the defendants did not report the cash wages the company was paying to the payroll service they used to prepare the company's weekly paychecks. On behalf of the company, the payroll service prepared quarterly tax filings which purported to report all wages paid to the employees and owners. However, because the payroll service was allegedly not told about the cash that was paid to the employees and owners, the quarterly filings were false and fraudulent and the Atlanta Meat Company underpaid its employee withholding taxes. In addition, the defendants allegedly failed to disclose the cash wages paid to the owners and employees to the accountant who prepared the company's corporate tax returns, therefore, the corporate returns for 2005 and 2006 were false and fraudulent. Each defendant also allegedly failed to report the cash he received as income on his personal tax returns for 2005 and 2006.

The tax conspiracy count carries a maximum sentence of 5 years in prison and a fine of up to $250,000. Each count charging the filing of false and fraudulent tax returns and reports carries a maximum sentence of 3 years in prison and a fine of up to $250,000. The conspiracy count and each count charging that the defendants encouraged and induced aliens to remain in the United States unlawfully carries a maximum penalty of 10 years in prison and a fine of up to $250,000.