Alexandria Couple Sentenced For Tax Fraud Involving Auto Body Shop

ALEXANDRIA, VA — An Alexandria husband and wife were sentenced to prison time for a tax fraud scheme that caused a $2.2 million tax revenue loss to the IRS.

The tax fraud involved corporate filings and business taxes at Butch’s, an auto body shop in Capital Heights, Maryland that was owned by Ercin Kalendar, 61. His wife, Lizette Kalendar, 44, served as manager and bookkeeper.

Both were sentenced in Maryland federal court to one year and one day in prison, followed by three years of supervised release, on charges of conspiracy related to tax fraud within their corporate filings and business taxes. The Kalendars will also pay restitution of $2,219,602.

Federal prosecutors say the Kalendars conspired to falsify information on IRS forms and avoided significant revenues from being deposited into Butch's corporate bank accounts and reported to the IRS. In tax years 2015 through 2018, annual income had been underreported by more than $6.6 million, and the IRS tax loss was $2,219,602, according to prosecutors. Checks not reported in Butch's income or tax returns were cashed at a Prince George’s County check cashing facility.

When the Kalendars decided in August 2018 to sell Butch's, they met with an undercover federal agent posing as a potential buyer. During these discussions, the couple revealed the profitability of the auto body shop and how they underreported revenues, according to court documents. Ercin Kalendar told the undercover agent that Butcher's filed tax returns had $2.2 million in gross receipts, while the actual gross receipts were near $3.1 million, $4.2 million, and $3.9 million in 2015, 2016, and 2017, respectively. He also said his father had used the same tactics when he ran Butch’s.

According to the plea agreements, wages of Butch’s employees were falsely reported on IRS Forms 941. Ercin Kalendar told the undercover agent extra pay for employees was given in cash to avoid taxes, except for one secretary who was not paid under the table. According to court documents, these cash payments caused a loss of tax revenue to Maryland.

Once the couple became aware the IRS was investigating the scheme in 2019, gross receipts at Butch's were reported to be over $4.5 million, which is over $2.2 million more than 2018.