CHICAGO – The Illinois Department of Financial and Professional Regulation today filed a formal complaint against Naveed Ahmed, a Certified Public Accountant, alleging violations of the Public Accounting Act. Ahmed pleaded guilty last Friday (1/25/13) to wire fraud, mail fraud and preparing fraudulent Illinois Sales and Use tax returns on behalf of eight gas station owners in a scheme to evade paying $5 million in state sales tax. His brother Asif Waheed, who works for the accounting firm but is not a CPA, also pleaded guilty last week.
Ahmed, of Arlington Heights, is a certified public accountant and owner of Midwest Financial Services, which has offices in Chicago and Arlington Heights. Today’s complaint details the alleged violations of the Public Accounting Act and asks for the maximum $5,000 fine for each violation of the act, including a maximum fine for every false tax return filed with the Department of Revenue. Sales and Use Tax returns were filed monthly for each gas station.
IDFPR has coordinated its enforcement activities with the Attorney General’s office and the Illinois Department of Revenue. Today’s complaint is the first alleging administrative violations against a licensed professional resulting from an ongoing joint investigation and enforcement effort between Attorney General Madigan’s office and the Department of Revenue. That investigation has resulted in the recovery of nearly $75 million in unpaid sales taxes to the state.
Midwest Financial has been in business since the 1990s and was known among gas station owners for assisting clients in lowering sales taxes owed to the state. As Midwest’s owner, Ahmed served as the accountant for several of the most egregious tax evaders among them. The case against Ahmed and Waheed revealed the brothers assisted the gas stations by falsifying sales figures on their monthly Illinois Sales and Use tax return forms. Some gas station owners provided incomplete information to Midwest Financial, and Waheed then fabricated sales numbers for them.
The brothers were sentenced to two years of felony probation under the condition they continue to cooperate with authorities in ongoing investigations and prosecutions of gas stations and other clients that underreported sales to the state. The eight gas stations that conspired to underreport sales with Ahmed and Waheed cooperated with authorities in the brothers’ prosecution. Those gas stations have previously pleaded guilty on other charges and repaid the state more than $5 million.