Grand Rapids bar owner admits to tax fraud

Farah's in Grand Rapids. (December 2016)

GRAND RAPIDS, Mich. (WOOD) — One of the owners of three Grand Rapids bars has admitted to skimming from his businesses so he wouldn’t have to pay as much in taxes.

Michael Farah pleaded guilty to a federal tax fraud charge. A second count fraud charge will be dismissed at sentencing.

Farah’s son, Brian Farah, previously confessed to his part in the crime, telling federal investigators how they stole the money from their three bars, Farah’s, Kuzzins and Drake’s.

Court records say that when the Farahs received a notice of a tax audit, they tried to hide income by deleting sales records. Federal authorities say they skimmed $232,000 from their business in 2013 and $176,000 in 2014. The sales then went unreported in their taxes.

According to Michigan Liquor License Commission records, their bars have so far not been affected by the federal case — though the conviction could jeopardize their liquor licenses.

The Grand Rapids planning director told 24 Hour News 8 the case will not affect a proposed 1,200-square foot expansion to Farah’s. Even if the father and son lose the liquor license, the approval of the expansion stays with the building, so potential new owners could still expand.

Brian Farah is set to be back in court in April for sentencing. Michael Farah will be sentenced in July. Each could spend up to three years in prison and may have to pay a $5,000 fine and restitution to the tune of $126,000.