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Peoria business owner sentenced to 36 months in federal prison

prisoner and jail bars
Courtesy: MGN

PEORIA (HOI) - On Tuesday, 30-year-old Alaa Iwaisi of Peoria was sentenced to 36 months in federal prison for filing false federal personal tax returns, aiding in the filing of false federal corporate returns and mail fraud for mailing false small business corporation tax returns to the state.

The tax years in question are from 2015 to 2017.

According to a press release, Iwaisi is the former owner of the MacArthur Corner Store Food & More in Peoria, who pleaded guilty in March to the nine-count indictment charging him with underreporting sales from the store on both federal and state returns.

During Iwaisi's sentencing hearing, Senior U.S. District Judge Michael M. Mihm found that even though Iwaisi had actual receipts reflecting the store’s sales, he provided false information about the sales to his return preparer.

Judge Mihm found that employees were often paid with cash from the register, despite advisements by the return preparer to issue company paychecks.

Judge Mihm also ordered for Iwaisi’s prison term to be followed by concurrent one- and three-year terms of supervised release on the tax and mail fraud charges

Iwaisi will need to pay the unpaid $108,125 taxes to the Internal Revenue Service, in addition to paying $86,105 to the Illinois Department of Revenue.

"Paying taxes is a civic duty that allows our society to thrive and for us to care for those who need it the most... People who cheat the tax system will be held accountable to include serving prison time.”

-Acting U.S. Attorney Douglas J. Quivey

Evidence presented at the hearing showed how Iwaisi had used $5,000 as down payment for the purchase of a $62,000 Range Rover, sold a 2004 BMW for $4,500, transferred title of a Recreational Vehicle, sold a 2015 Range Rover for $35,000, and used assets to pay for inventory at a convenience store recently purchased by his ex-wife.

When seeking financing for the Range Rover, Iwaisi falsely claimed that he had monthly income of $10,000 from managing a liquor store.  But, Iwaisi had also reported to U.S. Probation that he was unemployed and receiving unemployment compensation from the State of Illinois.

"This sentencing is a direct result of the excellent partnership IRS Criminal Investigation and the U.S. Attorney’s office has in combating violations of Federal law... This sentence should serve as an example to those who might think about trying to cheat the US tax system by under-reporting income. You will serve jail time for stealing from hard-working Americans.”

-Donald “Trey” Eakins, Acting Special Agent in Charge, IRS Criminal Investigation, Chicago Field Office
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