This week, it was announced that 31-year-old Andrew C. Poarch of Colorado Springs, Colorado had pled guilty to filing a false federal income tax return. Poarch was charged with the offense on December 20, 2018. He is now scheduled to be sentenced on May 22, 2019. Information associated with the case shows that Poarch and his wife opened a marijuana business in January of 2013.
From January 2013 through August 2016, the couple owned, operated and managed the business, which was called “The Lazy Lion”. Customers of the store were given the opportunity to join a private club by signing a customer agreement. This allowed members to visit the business and acquire marijuana for a set price.
The fee structure included a one-time initial membership fee, an entry fee for each subsequent visit, and a set fee for each purchase. The business was never registered as a recreational dispensary in the State of Colorado. The Lazy Lion obtained its marijuana from a handful of grow operations which stored marijuana at various warehouses in the Colorado Springs area.
Poarch and his wife owned and controlled the growing operations. Once the marijuana arrived at The Lazy Lion, customers could enter the store, buy marijuana and consume it on premises. The couple ran The Lazy Lion as a cash only business. An ATM was maintained within the dispensary so visitors could obtain cash within the premises.
To track revenues, the company utilized a point of sale program. During the investigation, it was determined that the gross revenues for the business were roughly $10,792,320 during the period of the scheme. Around September 29, 2015, Poarch and his wife signed a Form 1040 signed under penalties of perjury and represented that to the best of their knowledge the information provided was true, correct and complete.
The 2014 tax return claimed that the couple had an adjusted gross income of $19,294 and they were due a refund from the IRS. In reality, Poarch was aware that their adjusted gross income was roughly $2,807,761 and that the coupled owed $1,061,485 to the IRS. Poarch and his wife failed to file personal income tax returns for the 2015 and 2016 tax years. Further details can be found here.