DULUTH, Minn. – A Duluth man has been sentenced to one year and a day in prison and ordered to pay $620,362 in restitution for evading taxes by failing to report his business revenue and income to the IRS. Acting U.S. Attorney Charles J. Kovats made the announcement after Chief U.S. District Judge John R. Tunheim sentenced the defendant.
According to court documents, between June 2019 and April 2020, Shimon Shaked, 57, owned and operated several t-shirt and souvenir shops in Duluth’s Canal Park tourist zone, including I Love Duluth, I Love Duluth 2, Up North-The Good Life, and the Lake Life (the “Duluth Stores”). Shaked operated the Duluth Stores under a holding company called ALMS18, LLC, which he formed in 2012. Although Shaked owned, operated, and controlled ALMS18, LLC, he listed his teenage daughter as the nominal owner in order to hide and evade taxes on income he received from the company. In 2017, Shaked opened I Love Marquette, another souvenir store located in Marquette, Michigan, operated under the company SkyMqt, LLC.
According to his guilty plea, Shaked evaded the assessment of taxes on the income he earned through his Duluth and Michigan stores by failing to report the full revenue and income to the IRS. Specifically, Shaked reported the credit card sales for his stores, but failed to report or pay taxes on most of the cash sales. To further conceal his income, Shaked used the cash from the unreported cash sales to pay for personal expenses and to pay some of his employees’ overtime wages in cash. In doing so, Shaked failed to account for and pay over to the IRS some or all of the required federal payroll taxes due and owing for those employees. In total, Shaked evaded paying approximately $620,362 in taxes.
On October 13, 2021, Shaked pleaded guilty to one count of tax evasion.
This case was the result of an investigation conducted by the Criminal Investigation Division of the IRS.
Assistant U.S. Attorneys Joseph H. Thompson and Angela M. Munoz prosecuted the case.