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News Release from Comptroller Susan Combs

For Immediate Release
June 14, 2010

South Texas Convenience Store Owner Sentenced
For Tax Fraud Detected Under New Law

(AUSTIN) — Hidalgo County convenience store owner Rogelio Ramirez this week received a punishment of 10 years deferred adjudication after pleading guilty to two counts of sales tax fraud. Ramirez admitted to intentionally failing to remit more than $100,000 of sales tax collected from customers, a second degree felony. Ramirez also admitted to intentionally making false entries in and failing to make entries in sales tax records, a third degree felony.

In December 2009, Ramirez, the owner of two Pepe’s Drive In stores, was the first person arrested for tax fraud under a new law giving the Comptroller a new audit tool for detecting tax fraud.

“This case should send a strong message that we are serious about prosecuting those who commit tax fraud,” Texas Comptroller Susan Combs said. “By going after the bad guys, we protect the good guys – the honest business owners – against unfair competitors.”

Ramirez agreed to pay the state more than $116,000 in restitution as part of his plea bargain, paying $60,000 prior to sentencing. He will pay the balance of $56,290 as a condition of his deferred adjudication. Ramirez will also perform 200 hours of community service under the agreement.

The case was prosecuted by the Travis County District Attorney’s Office.

House Bill 11 passed by the 2007 Legislature requires distributors of alcohol and tobacco products to report sales to retail outlets monthly, giving the Comptroller’s auditors the ability to compare the distributors’ reports against taxable sales reported by retailers.

“Since alcohol and tobacco distributor reporting began in January 2008, our auditors have used this new tool to identify nearly $164 million in sales tax due to the state,” Combs said. “This tax might have gone unreported without the fraud detection capability offered by HB 11 and the deterrent effect of the new law on those who might be tempted to underreport sales tax.”

To find out more about the Criminal Investigation Division of the Texas Comptroller of Public Accounts, visit www.window.state.tx.us/about/cid/.

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