IRS executes search warrants at TGI Friday's - KUAM.com-KUAM News: On Air. Online. On Demand.

IRS executes search warrants at TGI Friday's

Posted: Updated:

by Mindy Aguon

Guam - Information provided by two informants, who work for TGI Friday's, has led the Internal Revenue Service to the conclusion that the restaurant's parent company, Watami Guam, Inc. and Guam business manager Lerma Aquino have violated federal tax regulations. According to the application for a search warrant, IRS Special Agent Todd Peterson, the investigation surrounds the restaurant's service charge and allegations that management told employees to under report their tips and wages.

The federal probe found evidence that the company failed to account and/or pay over employment taxes and filed false tax returns. Employers on Guam are required to withhold federal income taxes from an employee's wages and pay those to rev and tax.  They are also required to withhold social security and Medicare taxes and pay those to the IRS.

Special Agent Peterson's affidavit notes that "it does not appear that Watami reported a majority of the service charges paid to its employees as wages or tips." Informants also told the IRS that employees were told by management to claim 8% of their sales on bi-weekly tip reports prior to July 2008, even though they were receiving in excess of 15% in mandatory tips.

A paystub provided to authorities showed that tips equaled exactly two dollars per hour and even showed the paying bank as the third national bank of nowhere believed to be non-existent. IRS agents seized numerous documents and computers during the execution of the search warrants at both restaurant locations last week including pay stubs, bank records, gross receipts files, employee and sales records as well as other items believed to be evidence of a crime.

There have been no arrests made nor has anyone been charged in connection with the warrants.

A TGI Friday's supervisor in Tumon confirmed with KUAM News that IRS officials visited the restaurant last week, but could not provide any specific details.  The supervisor said they would know more from the IRS this Wednesday. KUAM News attempted to get comment from Aquino but our calls were not returned as of news time.

  • NEWS HEADLINESMore>>

  • Mother arrested for child found at school

    Mother arrested for child found at school

    A mom is in jail while her 4-year-old is in the custody of Child Protective Services. It apparently took Donicia Topasna Taitague almost five hours to report her child missing.  She was arrested for child abuse and neglect.More >>
    A mom is in jail while her 4-year-old is in the custody of Child Protective Services. It apparently took Donicia Topasna Taitague almost five hours to report her child missing.  She was arrested for child abuse and neglect.More >>
  • Military responds to senators on Surface Danger Zone

    Military responds to senators on Surface Danger Zone

    You may not be able to post more public comments, but opposition to the Navy's proposal continues to grow offline. A handful of senators have sent formal requests urging the U.S. Army Corps of Engineer's not move forward with establishing a danger zone inMore >>
    You may not be able to post more public comments, but opposition to the Navy's proposal continues to grow offline. A handful of senators have sent formal requests urging the U.S. Army Corps of Engineer's not move forward with establishing a danger zone inMore >>
  • GEC counting 2018 write-in ballots

    GEC counting 2018 write-in ballots

    The Guam Election Commission is busy recounting write-in ballots. At a meeting held Thursday morning, GEC Director Maria Pangelinan says their office is tabulating and recording all write-ins for the General Election. Though she notes they've done it befoMore >>
    The Guam Election Commission is busy recounting write-in ballots. At a meeting held Thursday morning, GEC Director Maria Pangelinan says their office is tabulating and recording all write-ins for the General Election. Though she notes they've done it befoMore >>
Powered by Frankly