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The Weekend Desk Report

Programming Note: The site is migrating to a different server on Monday, so we won't be back until Tuesday.

"A Lake View restaurant owner pleaded guilty this week to using sales suppression software to underreport more than $1 million in sales at her North Side restaurant," the Sun-Times reports.

"Sandra Sanchez, a 45-year-old woman from Morton Grove, admitted to using a 'tax zapper' at Cesar's Killer Margaritas, 3166 N. Clark St., to defraud the state out of more than $100,000 in taxes between 2012 and 2015, according to the Illinois' attorney general's office.

"The 'tax zapper' software automatically deletes records of cash sales transactions and reconciles the data so that reported sales match reported income, prosecutors said. The software was banned in 2013."

Huh. I'm relatively fascinated by this! I did not know such a thing as tax zapper software existed - and apparently in such abundance that it had to be banned!

Now, was that a federal or state ban? Doesn't say, though it appears the prosecution was by the state (see below for more on this). However . . .

"An Everett, Washington man who worked for a Canadian company that sells point of sale computer software, was sentenced today in U.S. District Court in Seattle to 18 months in prison and three years of supervised release for his role in a scheme to sell 'Tax Zapper' software, announced U.S. Attorney Annette L. Hayes," the U.S. Department of Justice said in 2017.

"John Yin, 66, pleaded guilty in December 2016, to wire fraud and conspiracy to defraud the government admitting that he promoted and sold a revenue suppression software that allowed restaurants to underreport their sales and illegally lower their tax bills.

"The software - sometimes called a 'Zapper' program - resulted in a loss amount of more than $3.4 million.

"At the sentencing hearing U.S. District Judge Richard A. Jones said Yin served as a facilitator for illegal operations.

"'This was illegal, this was criminal and you had to know you have to pay taxes . . . but you continued - motivated by greed.'"

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"Historically, state law enforcement agencies, not the Justice Department or Internal Revenue Service, have taken the lead in cracking down on the use of revenue suppression software," according to a 2017 post by Fox Rothschild.

"In early 2016, the Attorney General of Washington State filed what he called the 'first-of-its-kind' criminal case against a restauranteur, Yu-Ling Wong, for allegedly using sales suppression software to avoid paying nearly $400,000 in state sales tax.

"That case, which evidently spawned the federal prosecution of Yin, began as a routine audit by the Washington State Department of Revenue, which trains its auditors to detect the use of revenue suppression software . . .

"Many states have passed laws outlawing the use of revenue suppression software, including Washington, Michigan, Florida, Georgia, Utah and West Virginia, and others are considering proposals to enact such laws."

And others . . . including Illinois.

"On October 4, Governor Brown of California signed into law Assembly Bill No. 781, which creates a new criminal offense relating to the purchase, installation, use, transfer, or sale of any 'automated sales suppression device or zapper or phantom-ware' with the intent to defeat or evade the determination of the state's sales or use taxes," LexisNexis reported in 2013.

"California joins Texas, North Carolina, Connecticut, Illinois, and other states in enacting a law targeting automated sale suppression devices, zappers, or phantom-ware."

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Here's the Illinois bill that passed in 2013.

"Provides that a person who knowingly sells, purchases, installs, transfers, possesses, uses, or accesses any automated sales device, zapper, or phantom-ware for use in an electronic cash register or other point-of-sale system in this State is guilty of a Class 3 felony."

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Now, let's dig further into the specific case in hand. From a 2018 Patch report:

"Federal prosecutors last week charged a Morton Grove resident with falsifying the tax returns of a Chicago restaurant, prosecutors said.

"Federal investigators have been focusing on sales suppression software and other ways that restaurants owners hide revenue by falsifying receipts, according to the U.S. Department of Justice.

"Such suppression software or devices, so-called 'zappers,' automatically delete and falsify sales data to make records of cash sales appear to match reported income.

"Sandra Sanchez, 44, a Morton Grove resident and the owner of Cesar's Tacos at 3166 N. Clark St. in Chicago, which describes itself as the 'home of the killer margaritas,' knowingly falsified the business' 2012 taxes.

"She reported $1,730,642 in revenue despite knowing that 'gross receipts of Cesar's Tacos, Inc. were substantially more than the amount reported,' according to the indictment."

So it was the feds?

"Last August, Illinois Attorney General Lisa Madigan announced Sandra Sanchez would be the first person to be charged in state court under a 2013 law intended to make it easier to prosecute people for using "zappers."

"The owner of the Lakeview Cesar's Killer Margaritas restaurant faces charges of theft and tax evasion in Cook County court after Madigan said Sanchez used an automated device to avoid paying more than $1 million in sales tax to the state department of revenue."

So both the state and the feds went after her?

"Last August, Illinois Attorney General Lisa Madigan announced Sandra Sanchez would be the first person to be charged in state court under a 2013 law intended to make it easier to prosecute people for using 'zappers.'"

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Back to today's Sun-Times:

"Sanchez's conviction is the first in Illinois to involve such technology, prosecutors said. She was sentenced to two years in prison and one year of supervised release."

So in six years of the state law's existence, this is the only conviction? Is this not as big a problem as thought at the time the law was passed, or has enforcement been lax? Or perhaps business-owners are sufficiently deterred. Assignment Desk, activate!

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Patch:

"Federal prosecutors also announced criminal charges against two other restaurant owners as part of the same investigation, which remains ongoing.

"They include Huli Zhao, 59, of Westmont, the owner of Katy's Dumpling House in Westmont and Chun Xu Zhang, 42, of Aurora, who owns Sushi City in Downers Grove; Quan Shun Chen, 42, a Chicago resident and the owner of Hunan Spring in Evanston and Israel Sanchez, 43, of Chicago, the owner of Cesar's on Broadway on North Broadway in Chicago, according to the U.S. attorney's office."

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Also, I'm confused whether the Chicago restaurant was called Cesar's Tacos or Cesar's Killer Margaritas. Also, I wonder if their margaritas really are killer. Fact-check, please!

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Aha!

"Sandra Sanchez, 44, a Morton Grove resident and the owner of Cesar's Tacos at 3166 N. Clark St. in Chicago and Israel Sanchez, 43, of Chicago, the owner of Cesar's on Broadway at 2924 N. Broadway St. in Chicago were each charged with knowingly filing false tax returns Tuesday in U.S. District Court in Chicago," Patch reported.

"Both restaurants are also known as 'Cesar's Killer Margaritas.'"

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BUT . . . on their website, they call themselves "Cesar's - Home Of The Killer Margaritas." And their URL is killermargaritas.com, which I have to admit is pretty killer.

Cesar's:

"If you haven't tried our signature Killer Margaritas, you're truly missing out. Our secret concoctions of ultimate goodness will thrill any palate. We have over 12 flavors such as Lime and Blue Curacao, as well as seasonal flavors like Chamoy-garita and Mango. Served on the rocks or frozen.

"We encourage you to get creative. Try the Raspberry blended with a sugar rim. Or maybe you'd prefer the Guava on ice with Chile salt. Whatever your mood, we've got a margarita to match it."

Also, you can share your pics on social media for freebies and discounts. Like their Instagram, presumably:

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Plus: Cesar's YouTube promo video.

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Finally, was Cesar's cheating their employees? I tried to think hard about this but it made my head hurt.

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Whew, what a journey. I just may head over for a killer margarita now!

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New on the Beachwood . . .

The Beachwood Radio Sports Hour #271: Someone Told You So, Repeatedly. It Might Have Been Us.
What the Cubs and Trubisky have in common. Including: Maddon's Post; Fixing The Unclutch (Another Word You Could Use Is 'Chokey') Cubs; The White Sox Core Is No Joke; Run, Mitchell, Run; Blackhawks Czech Line: Wendell Carter Jr.'s Rule-Breaking Strip Club Visit; In Other Words, The Fire Have No Shot At The Playoffs; and Red Star Sam Kerr Is A Star.

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Mosquito Shield Is Here
Now serving Chicago with its Mosquito Protection Barrier™ including FlexBlend, the industry's only intelligent spray-blend technology.

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Weekend ChicagoReddit

Photographers of Chicagohenge from r/chicago

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Weekend ChicagoGram

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Weekend ChicagoTube

So Long, Everybody.

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Weekend BeachBook

Why Are Rich People So Mean?

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Why The Myth Of Period-Syncing Won't Go Away.

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Jimmy Hoffa And Scorsese's The Irishman: A True Story?

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Rocket Dockets: How An Effort To Speed Immigration Cases Is Causing Havoc For Countless Families.

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Full-Time Music Positions Restored To Milwaukee Public Schools.

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LSAT Goes Digital-Only.

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Boise State Has A Dog Who Retrieves The Tee After Kickoffs.

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Groupon Still Searching For Admired Women.

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Dark Times Ditka.

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Loyalty.

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A Personal Note.

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Weekend TweetWood
A sampling of the delight and disgust you can find @BeachwoodReport.

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The Weekend Desk Zip Line: Tips welcome.



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Posted on September 28, 2019


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