The owner of a chain of bikini barista coffee stands was sentenced to 10 months in prison and fined $75,000 for tax fraud in U.S. District Court in Seattle on Thursday.
Prosecutors say Assad Baragzai, 47, of Yarrow Point, Washington, failed to report as much as $6 million in income between 2016 and 2020.
Judge Tana Lin criticized Baragzai’s actions, stating that the tax system “is an honor system… and you weren’t honorable.”
The judge determined that Baragzai’s fraudulent activities resulted in a tax loss of more than $1.3 million over five years, including $687,000 in 2017 alone.
“Mr. Baragzai had great business success, but failed to fund the community that made that success possible,” said U.S. Attorney Tessa M. Gorman. “Such conduct is not erased by paying what is owed some five years later – it is appropriate that he serve prison time for his willful tax fraud.”
According to court documents, Baragzai underreported his income to his tax accountant to avoid paying his share of taxes.
The government argued his tax fraud deprived public programs, such as school lunches, of critical funding. Assistant U.S. Attorney Mike Dion wrote that Baragzai’s actions could have covered the cost of 462,000 school lunches.
Baragzai is the second person sentenced in this investigation. In October 2024, his brother-in-law, Rajesh Mathew, 45, of Auburn, Washington, received 30 days in jail, a $5,000 fine, and 100 hours of community service for filing a false tax return.
Baragzai has agreed to pay restitution to the IRS but may face additional civil penalties, fines, and interest.
Adam Jobes, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office, said, “Instead of paying his fair share, Mr. Baragzai misrepresented his income to furnish an already-lavish lifestyle.”
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