Owner of Tacos Guaymas restaurants charged with felony theft

Salvador Sahagun is accused of using software to avoid paying $5.6 million in taxes.

EVERETT — The owner of a string of Mexican restaurants in Snohomish and King counties is facing felony theft charges after audits allegedly turned up evidence he’s stolen more than $5.6 million in state taxes using software that partially masked his commercial success.

The case was built in part on state employees going undercover on 35 occasions to order lunches and dinners, according to documents filed this week in Snohomish County Superior Court.

Salvador Sahagun, 57, of Bothell, used sales-suppression software at six Tacos Guaymas restaurants he operates at locations in Marysville, Lynnwood and Seattle to avoid paying appropriate taxes, according to the state Attorney General’s Office.

Sahagun is charged with two counts of first-degree theft and one count of unlawful use of sales-suppression software. The felonies carry with them potential prison time and steep fines.

The case marks only the second time state prosecutors have brought tax-theft charges on behalf of the state Department of Revenue for alleged use of sale-suppression software, the agency’s communications manager, Anna Gill, said Thursday. The earlier case involved a Bellevue restaurant and nearly $400,000 in stolen taxes.

Restaurants and other businesses in Washington are required to report their gross receipts from retail sales and to pay the appropriate taxes on those transactions, Andrew Hamilton, an assistant state attorney general, said in court papers.

An audit by the revenue department compared point-of-sale records for the restaurants with tax returns. The auditor “concluded that income from each of these restaurants had been substantially underreported,” Hamilton wrote.

The audit found that most sales receipts were missing from the restaurants’ records and that led to suspicions that Sahagun was using the software.

Sales-suppression software, Hamilton explained in court papers, allows a business to conduct a transaction for say $50 while recording that only $10 traded hands. The software also can delete evidence of a sale.

“To determine whether such software was in use at these restaurants, a number of (state revenue department) employees acting in an undercover capacity went to the various restaurants where they paid cash for meals,” Hamilton wrote.

The 35 visits occurred in 2015. When the investigators checked the receipts against the restaurant records, they found several that correctly matched the transactions but others that did not, the prosecutor said. The auditor and a specialist determined there was evidence of sales-suppression software being used, the charging papers say.

Such software is illegal to possess and use in Washington. An Everett man was prosecuted federally in 2016 for selling revenue-suppression software made by a Canadian company.

In this case, the underpaid taxes reportedly added up to millions of dollars, the state contends. At the Lynnwood restaurant, the stolen taxes amounted to about $43,000, but in Marysville, it totaled more than $1.9 million, the documents say.

Sahagun told the auditor he runs each of the restaurants, including gathering the cash and reviewing the previous day’s sales, documents say.

“This is the second-ever prosecution from my office and the second-ever in Washington state for this relatively new type of scheme,” state Attorney General Bob Ferguson said. “Sales suppression software helps dishonest businesses steal from Washington taxpayers, and puts honest businesses at a competitive disadvantage. My office is committed to stopping tax cheats who siphon funding from our schools, parks and emergency services.”

Scott North: 425-339-3431; north@herald net.com. Twitter: @snorthnews.

Talk to us

More in Local News

Looking east toward the U.S. 2 trestle as cars begin to backup on Thursday, March 1, 2018 in Everett, Wa. The aging westbound span needs replacing and local politicians are looking to federal dollars to get the replacement started. (Andy Bronson / The Herald)
U.S. 2 trestle rebuild part of Senate transportation package

Time is short to get the $17.8 billion plan passed. Its link to climate change bills adds intrigue.

Eric Adler, the mystery man who is on Twitter as @EdmondsScanner (E. Wong)
Revealed: The mystery man behind the @EdmondsScanner tweets

He’s a 50-year-old mail carrier who dusted off his English degree to curate 6,000 tales on Twitter.

Man identified in fatal Mill Creek crash

Ian Jensen, 32, died after a multi-vehicle accident Saturday on 35th Avenue SE.

Package funding U.S. 2 trestle, Monroe bypass on the move

A $17.8 billion plan dealing with highways, ferries and transit has cleared the state Senate transportation panel.

Explosion shatters Everett apartment complex windows

Police were called to the Monte Cristo apartment complex, 2929 Hoyt Ave., Tuesday night.

NO CAPTION NECESSARY: Logo for the Cornfield Report by Jerry Cornfield. 20200112
Things are heating up in Olympia — and not just the weather

Here’s what’s happening on Day 94 of the 2021 session of the Washington Legislature.

Jesse L. Hartman (Everett Police Department)
Suspect in fatal Everett shooting captured at U.S. border

Jesse Hartman was arrested in California as he tried to re-enter the country from Mexico.

(Getty Images)
How to get vaccinated in Snohomish County

Availability of doses is always changing, so keep checking back.

As eligibility expands, 4,700 flock to local vaccine clinics

It might be difficult to secure a dose right away in Snohomish County, but keep trying, officials say.

Most Read