NJ Restaurant Owners Charged In $1M In Tax Evasion Scheme: Feds

Torri Donley

HADDON TOWNSHIP, NJ — The owners of two Crown Fried Chicken restaurants in South Jersey are accused of harboring undocumented workers and engaging in $1 million in tax evasion, according to federal authorities. Ali Sher Khan, 51 of Haddon Township, and Ali Khan, 48 of Clementon, are among a group […]

HADDON TOWNSHIP, NJ — The owners of two Crown Fried Chicken restaurants in South Jersey are accused of harboring undocumented workers and engaging in $1 million in tax evasion, according to federal authorities.

Ali Sher Khan, 51 of Haddon Township, and Ali Khan, 48 of Clementon, are among a group of people who run two Crown Fried Chicken restaurants in Camden and one in Burlington Township, according to U.S. Attorney Craig Carpenito.

There were six other co-owners, but none of them were named or charged in the indictment.
Authorities allege that they employed undocumented immigrants at their restaurants and paid them in cash without taking taxes out of the employees’ pay. The payroll tax forms they filed with the IRS didn’t accurately reflect the number of employees they had, authorities said.

Authorities said they underreported $1,055,498 in payroll taxes for the two Camden restaurants and $648,837 in payroll taxes for the Burlington restaurant. This resulted in a tax loss to the government of $308,742.

Ali Sher Khan and one of his other business partners also allowed the undocumented workers to live in their homes and didn’t file the rent they received as part of their personal income taxes, according to authorities.

From 2013 to 2016, Ali Sher Khan and Ali Khan took a large amount of money out of their businesses without reporting it on their income tax returns, according to authorities.

Ali Sher Khan did not disclose $831,517 in income from the Crown Fried Chicken restaurants, causing a tax loss of $252,131, authorities said.

Ali Khan did not report or otherwise disclose $394,894 in income from the Crown Fried Chicken restaurants, causing a tax loss of $113,836, authorities said.

When questioned by special agents with the IRS and FBI, Ali Sher Khan lied about operating the business, hiring or firing the employees at these businesses, and signing any tax documents related to the businesses, authorities said. He also denied supplying information to the businesses’ account for the tax returns.

Ali Sher Khan is charged with one count of conspiracy to evade income taxes; 20 counts of failing to collect, account for, and pay over payroll taxes for corporate entities of two Crown Fried Chicken restaurants; three counts of income tax evasions for years 2014 through 2016; one count of harboring illegal aliens; one count of unlawful employment of aliens; and one count of making false statements to the IRS and FBI. He appeared in court on Wednesday and was released on $250,000 unsecured bond.

Ali Khan is charged with one count of conspiracy to evade income taxes; 10 counts of failing to collect, account for, and pay over payroll taxes for corporate entities of two Crown Fried Chicken restaurants; three counts of income tax evasion for the years 2014 through 2016; one count of harboring illegal aliens; and one count of unlawful employment of aliens. He has not yet appeared in court.

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