A Duluth souvenir store owner who is accused of evading more than $800,000 worth of income tax was charged in Minneapolis Thursday.
Shimon Shaked, 56, is charged in U.S. District Court in Minneapolis with tax evasion, failure to file a tax return and failure to account for and pay employment tax. Shaked owns multiple souvenir stores in the Canal Park area of Duluth, including I Love Duluth, I Love Duluth 2, Up North-The Good Life and The Lake Life.
Shaked operated the stores under a holding company he owned, ALMS18, LLC. But he listed his 18-year-old daughter as the nominal owner of the stores to evade taxes, the U.S. Attorney's Office says.
According to court documents, instead of reporting income from the stores as his own, Shaked listed the income under his daughter’s tax returns from 2013 to 2015. He also further evaded taxes by failing to report all income to the IRS by only reporting credit card sales and not cash sales.
Shaked also used the company bank account to pay for personal experiences, including trying to buy an alligator farm in Florida, charges state.
In 2017 and 2018, Shaked opened two more souvenir stores, this time in Michigan, the U.S. Attorney's Office says. Shaked also did not file a tax return in 2018.
According to court court documents, Shaked failed to report more than $4 million of income in total.
Shaked also hired international and non-international students to work at his stores, charges say. By paying his employees in cash, he avoided required federal payroll taxes.