The U.S. District Court sentenced one co-owner of a chain of Washington bikini coffee stands on Oct. 9 in a multimillion-dollar tax avoidance case.
Rajesh Mathew, 45, of Auburn pleaded guilty in March 2024 to making and subscribing a false tax return.
At his Oct. 9 sentencing hearing, U.S. District Judge Tana Lin stated, “there is no excuse for hiding half a million dollars in a life of privilege, except greed.”
His brother-in-law, Assad Baragzai, 47, of Auburn, pleaded guilty on Aug. 29 in the U.S. District Court in Seattle to having created and subscribing a false tax return, and having not reported up to $6 million in income between 2016 and 2020, according to court documents.
Mathew and Baragzai are the owners of Ladybug Espresso, a bikini barista coffee stand chain with locations in Seattle, Renton, Kent, Auburn and more. According to a news release from the U.S. Department of Justice, various members of Mathew and Baragzai’s family own several coffee stands.
The Internal Revenue Service Criminal Investigation department investigated the case.
”The sentencing today is the first in a series of cases,” according to the DOJ.
Judge Lin sentenced Mathew to 30 days in prison, a $5,000 fine, and 100 hours of community service for tax fraud.
The court rejected Mathew’s defense team’s request for a sentence of home confinement as a result of the proposal not reflecting the seriousness of the offense and serving as inconvenient, according to the DOJ.
Mathew finished paying restitution to the Internal Revenue Service at the time of his sentencing. He potentially faces additional civil penalties, fines, and interest for the tax loss.
Judge Lin will sentence Baragzai in a hearing scheduled for Nov. 18, where he faces up to three years in prison.
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