Authorities charge business owners with tax crimes.
Johni Semma, a business owner from Walled Lake, Michigan, has been sentenced to two years in prison for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. Semma owned Bayside Sports Bar & Grill in Walled Lake and The Coliseum, a strip club in Detroit. Investigators discovered, from the first quarter of 2008 through the first quarter of 2015, Semma only filed two employment tax returns with the Internal Revenue Service, despite having 29 to complete during this period. He also did not pay an estimated $1.3 million in taxes.
In 2012, Semma sold The Coliseum for approximately $5.9 million, but did not file an individual income tax return or pay taxes that year, which means he committed tax evasion in the amount of approximately $463,000. Semma pleaded guilty on Aug. 28, 2019, to one count of employment tax fraud and one count of failure to file his return. U.S. District Court Judge Paul D. Borman ordered him to pay $1,793,771 in restitution in addition to the term.
Semma’s not the only businessman in recent months found to have evading the IRS. Former Reynolds & Reynolds CEO, Robert Brockman, was also found to have hid approximately $2 billion in income from the government and is scheduled to stand trial in Houston. The one-time executive had filed a motion to have the hearing in his hometown and a federal judge ordered the criminal case transferred from San Francisco.
Reynolds & Reynolds is a leading provider of automobile software development firm. The international company is headquartered in Dayton, Ohio, with operations in Houston and College Station, Texas, and Celina, Ohio, as well as in Canada, the U.K., and Europe.
As Brockman stepped down as CEO last year, President and COO Tommy Barras took his place. Barras said at the time, “I am both humbled and excited by the opportunity to lead this company. I have the benefit of the most talented senior executive leadership team with decades of automotive experience to lean on. We also have talented associates who are passionate about the business. That’s an unbeatable combination and the future looks very bright.”
Brockman, now 79, argued in court he has been treated for dementia, among other debilitating ailments. His motion cited he suffers from “Parkinson’s disease, Parkinsonism, Lewy body dementia, or ‘some combination’ of all three.” He also asked the court to consider a hearing to determine whether he is mentally competent to stand trial.
“The case against Mr. Brockman stems from allegations that he evaded taxes tied to his profits on investments in private-equity funds managed by Vista Equity Partners, a firm founded by billionaire Robert Smith, the wealthiest Black person in the U.S. Mr. Brockman’s residence in Houston, the possibility of hardship related to his illness, and San Francisco’s crowded docket weighed in favor of moving the case to Houston,” U.S. District Judge William Alsup wrote. The decision of whether to hold a mental competency hearing is still outstanding.