On Thursday, September 7, 2017, Acting Deputy Assistant Attorney General Stuart M. Goldberg announced that the owners of several Austin, Texas area restaurants had been indicted on federal tax crimes. The indictment against the couple was unsealed today. The indictment charged married couple Michael Herman and Cynthia Herman with conspiring to defraud the United States by impairing the Internal Revenue Service and filing false individual tax returns for tax years 2010 to 2012.
Michael Herman has additionally been charged with filing false corporate tax returns for the same tax period. The indictment claims that the Hermans owned and operated Cindy’s Gone Hog Wild, which is a restaurant and bar in Travis County, Texas. Cindy’s filed corporate tax returns. The couple’s other two restaurants, Cindy’s Downtown and Hasler Brothers Steakhouse, are located in Bastrop County. The two latter restaurants reported income and expenses on the couple’s personal tax returns.
The indictment accuses the couple of depositing only a portion of the restaurants’ cash receipts into their business banking accounts and reporting the limited deposits to their tax return preparer. The couple is also accused of paying for personal expenses utilizing money from their business accounts. The expenses included swimming pool repairs, utility bills, and the salary for a household employee.
The indictment claims that the Herman couple filed false tax returns by underreporting their income and falsely deducting personal expenses paid with the corporate account as business expenses. At this point in time, the defendants are only accused of the alleged crimes. They remain innocent until proven guilty in a court of law.