DETROIT - Happy's Pizza owner Happy Asker and four others in his company were indicted by a grand jury with tax fraud, obstruction and other charges in U.S. District Court on Tuesday afternoon.
Asker, Maher Bashi, and Tom J. Yaldo, who both work for Asker, are all accused of maintaining two sets of books and records, underreporting payroll expenses, paying employees in cash and failing to report income to the IRS.
The scheme was known within the Happy's Pizza franchises as the "Profit Split Scheme," according to the 62-count indictment; 40 of the counts are against Asker.
The indictment also says that that from 2004 to 2011, the Happy's Pizza franchises paid about $2.1 million in wages to shareholders and employees that were not reported to the IRS.
Arkan Summa and Tagrid Summa Bashi are also named defendants. Summa is charged with obstruction for concealing his role in the company, and Summa Bashi is charged with providing false information to Special Agents for the IRS.
Filing false tax returns and obstruction both carry a maximum penalty of three years in prison and a $250,000 fine for each count.
Asker, and the other men charged with conspiracy, face up to five years in prison and a $25,000 fine if convicted.
The charges come three years after the investigators at our sister station in Detroit were first to report how federal agents raided Happy's Pizza's Farmington Hills-based offices, and left with boxes of company records.
Federal agents from the IRS criminal division and the Drug Enforcement Agency were at the 2010 raid. At the time, witnesses told 7 Action News in Detroit that there were around 30 agents involved, and were inside the then newly-opened headquarters and training center for several hours.
When they left, witnesses say the agents had loaded up a rental van with boxes of company records.
Happy's Pizza is a local rags-to-riches success story. The owner, Happy Asker, started from nothing and built a huge chain of restaurants.
7 Action News Investigator Scott Lewis questioned Asker in 2010 about the raid.
"Could you just tell me why drug enforcement officers would be interested in records from a pizza company?" asked Lewis.
Asker didn't answer.
Asker started the pizza business at the age of 18 with one pizzeria at 7 Mile and Hoover in 1994, and the chain has since grown to more than 65 restaurants. They've even expanded into Ohio and Illinois. Asker was named businessperson of the year by the Chaldean news in 2010.
In the story Asker attributes his success to good customer service, and an extensive menu. He said every restaurant is built brand new from the ground up with top notch equipment and a decor that includes granite countertops.
A company spokesperson said, "We understand there is an ongoing investigation and are cooperating 100 percent. At this point we can't speak any further."