Do Not Mess with the IRS

A federal case filed recently in Las Vegas was brought to my attention by a reader of my blogs. I retrieved all of the available documents from PACER and they're uploaded to my Updates (Documents) page of my website. The only named defendant in the case is Emmanouil (Manny) Varagiannis and though the indictment includes numerous statements referencing prostitution, there is no actual charge for anything related. The charges involve transaction structuring to evade reporting requirements.

Transaction structuring is defined as making deposits to a financial institution (banks in this case) and "structuring" to avoid the requirement that a report be filled out by the bank teller for deposits of $10K and over. According to what I read, one bank teller sort of advised him to divide deposits and avoid the government form and that's where it all began.

As for the allegations of prositution in his escort business, or rather outcall promoter business, the man is not charged with anything related. I believe that detectives in Las Vegas managed to bust an escort or two, but that certainly won't make a legal case against the acting manager, which is the position Varagiannis holds. Some woman that is owner of a men's club and was obviously involved with him in past made allegations, but I do not see anything in any document claiming there to be a wiretap or tape of the admissions the woman claims that Varagiannis made privately.


Scorned woman syndrome or what?

It does seem that way from what I read in the indictment and other documents. Apparently detectives approached the woman at her club and the conversation evolved to what is stated in the indictment:

Varagiannis Las Vegas Indictment

Really this is all about structuring to avoid IRS reporting requirements. This is a main reason that if opening and operating an escort business or an outcall promotion company, you need to see an accountant. If you open in Vegas, you need an accountant immediately and before an attorney. Clark County charges a % of the gross income as a part of the license, so there's no way you could procrastinate on the accountant.

There are other allegations in the indictment that refer to a program offering taxi drivers kickbacks for referrals. I am not clear on why it is even mentioned as it is not illegal to do so; however, the cabbie (taxi driver) would of course be responsible to report any money earned on his income tax filings.

The bottom line to this case is do not mess with the IRS, no matter how anyone at a bank suggests you structure your deposits. You are responsible. More on this case as documents are made available.