SANTA ANA, CALIFORNIA – The owner of a Huntington Beach-based military contractor plead guilty to federal tax charges for failing to report to the IRS millions of dollars his company received for providing services to the military at Baghdad International Airport.
Nadim “Nick” Saifan Jr., 48, who resides in Huntington Beach, was the owner and operator of Defense Logistical Support & Services Corporation, which provided services to the military and some civilian companies in Iraq.
Saifan plead guilty Monday to two counts of attempted tax evasion. Saifan pleaded guilty to two of the five counts contained in an indictment returned by a federal grand jury in 2011.
He admitted to substantially underreporting income on his company’s 2005 corporate tax return and his personal tax return for 2006.
From August 2004 through October 2007, officials said Defense Logistical Support received nearly $16 million from the U.S. military alone for services in Iraq, according to court documents. Saifan reported only a small fraction of this income on Defense Logistical Support’s corporate tax returns filed with the IRS.
In addition to failing to report millions of dollars of corporate income, authorities said Saifan used Defense Logistical funds to pay for personal expenses without reporting this money as personal income.
Federal prosecutors alleged in court papers that the defendant used corporate money to make approximately $880,000 in down payments on real estate and approximately $292,000 in payments towards vehicles that included a Ferrari and a Rolls-Royce, officials said.
Prosecutors stated that Saifan owes at least $4.5 million in unpaid corporate and personal taxes and caused a total tax loss to the government of at least $7 million.
Saifan could get up to 10 years in prison when he is sentenced in August.
After Saifan pleaded guilty, U.S. District Court Judge Cormac Carney revoked Saifan’s bond and remanded him into federal custody pending his sentencing.