The owner of a chain of Seattle-area bikini barista coffee stands pleaded guilty last week to tax fraud and faces up to three years in prison.
In a plea agreement, 47-year-old Assad Baragzai of Auburn, Washington, admitted that between 2016 and 2020, he failed to report as much as $6 million worth of income on his tax returns, according to investigators.
Baragzai, who owns a string of coffee stands in Washington State under the name Ladybug Espresso, is the second defendant to enter a guilty plea in the investigation. His brother-in-law, Rajesh Mathew of Auburn, also pleaded guilty to tax fraud.
Prosecutors say Matthew also “underreported a substantial amount of income over a period of several years.” Matthew’s sentencing is scheduled for Oct. 9, while Baragzai’s sentencing is scheduled for Nov. 18.
The case has been investigated by an IRS unit and is being prosecuted by Assistant United States Attorney Michael Dion.
The government contends that the tax loss over the five years that Baragzai underreported his income is more than $1.7 million. Bargzai disputes the figure, and instead claims the tax loss to be $1.3 million. A judge will determine the actual tax loss during sentencing.
“Both Baragzai and Mathew have agreed to make restitution to the Internal Revenue Service,” the United States Attorney’s office for the Western District of Washington said in an announcement of the plea deal. “Both may also face additional civil penalties, fines, and interest for the tax loss.”
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