Miami Tire Importers Indicted for Excise Tax Conspiracy and Tax Evasion

The United States Department of Justice has issued a press release regarding two Miami-based business owners, Marco Parra and Eira Luces-Parra, being indicted for conspiracy to defraud the government and tax evasion.

Per the press release:

According to the indictment, Marco Parra and Eira Luces-Parra, a married couple, owned and operated Road Tire Plus Corp (Road Tire), a tire importer located in Miami, Florida. From 2013 through 2016, the Parras allegedly conspired with others in the tire industry to evade paying federal excise taxes on tires.

Truck tires marked for highway use are subject to excise taxes. A tire importer is liable for the excise tax when the truck tires are sold. Tire importers typically pass on the cost of the excise tax to the tire retailers, their customers, and collect the excise taxes from them. But if the tires are later exported rather than sold domestically, the law provides for a credit for the excise taxes paid.

From 2013 through 2016, the Parras sold taxable truck tires to various tire retailers in South Florida. According to the indictment, the Parras collected from some customers the excise taxes that were due, but did not remit those taxes to the Internal Revenue Service (IRS) and did not file tax returns reporting the tire sales as they were obligated to do.

For other customers, the Parras allegedly never collected the federal excise taxes due on the tire sales. Instead, the Parras allegedly obtained from these coconspirators false bills of lading claiming that the tires were exported, so that the Parras could obtain an excise tax credit even though they knew the tires were not exported.

If convicted, the Parras face a maximum sentence of five years in prison for each count. They also face a period of supervised release, restitution, and monetary penalties.

Per the Tax Division’s Manual, conspiracy to defraud the United States is charged under 18 U.S.C. § 371 stating “[i]f two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose”. The factors for whether an activity defrauds the government under 18 U.S.C. § are laid out by the Criminal Resource Manual as the following:

1. They cheat the government out of money or property;
2. They interfere or obstruct legitimate Government activity; or
3. They make wrongful use of a governmental instrumentality.

Furthermore, according to the  Tax Division’s Manual, tax evasion is charged under 26 U.S.C. § 7201. The elements for a charge are listed below:

1.  An affirmative act constituting an attempt to evade or defeat a tax or the payment thereof. Sansone v. United States, 380 U.S. 343, 351 (1965); Spies v. United States, 317 U.S. 492, 497-99 (1943).
2. An additional tax due and owing. Boulware v. United States, 552 U.S. 421, 424 (2008); Sansone v. United States, 380 U.S. 343, 351 (1965); Lawn v. United States, 355 U.S. 339, 361 (1958).
3. Willfulness. Cheek v. United States, 498 U.S. 192, 193 (1991); United States v. Pomponio, 429 U.S. 10, 12 (1976); United States v. Bishop, 412 U.S. 346, 358-59 (1973); Sansone v. United States, 380 U.S. 343, 351 (1965); Holland v. United States, 348 U.S. 121, 124, 139 (1954).

As previously stated, the Parras face a maximum sentence of five years for each count along with supervised release, restitution, and monetary penalties.

All persons who are merely charged with crimes are presumed innocent until proven guilty. Furthermore, sentences can vary depending on several factors which vary from person to person. This blog post does not implicitly or explicitly suggest there is basis to the prosecuting agency’s allegations or take any position on the strengths or weaknesses of the government’s positions.

Posted on 02/21/2020 by Benjamin Tu.