Owner of Engineering Firm Sentenced To Five Years For Tax Scheme

News Release from US DoJ, June 27, 2019

HONOLULU – Wagdy A. Guirguis was sentenced today to five years in prison for conspiracy to defraud the United States announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney Kenji M. Price for the District of Hawaii. As part of his sentence, Guirguis must serve three years of supervised release, and pay $3,308,868.00 in restitution to the Internal Revenue Service (IRS) and $6,730.24 in prosecution costs.

On November 20, 2018, a jury convicted Guirguis and co-conspirator Michael Higa, who was a certified public accountant, of conspiracy. In addition, Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of corruptly endeavoring to obstruct and impede the IRS, and one count of witness tampering. The convictions arose from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment taxes, corporate and individual income taxes, and IRS penalties.

According to evidence presented at trial, Guirguis and Higa used nominee entities to divert more than $1 million in funds from Guirguis’ businesses for Guirguis’ personal use. Guirguis made numerous false statements to IRS employees over the years during their attempts to collect taxes. In addition, to impede the criminal investigation into his tax violations, Guirguis falsely told an employee, who had testified before the grand jury, that he did not know about the false backdating in the books of the nominee entity, and asked the employee to sign a false statement to that effect.

Sentencing for Michael Higa is scheduled for July 1.

The case was investigated by the IRS-Criminal Investigation Division. It was prosecuted by Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada and Assistant U.S. Attorney Rebecca Perlmutter for the District of Hawaii. 

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PBN: Honolulu engineering firm owner sentenced to 5 years in federal prison, must pay $3M restitution