DENVER - The owner of Daveco Liquors has pleaded guilty to racketeering in a scheme to underpay sales tax to the City of Thornton and the State of Colorado, prosecutors said. It's a scheme the CALL 7 Investigators were first to report on in 2009.
The Denver District Attorney's office said Hani D. Sawaged, 59, has pleaded guilty to violating the Colorado Organized Crime Control Act. In exchange for his guilty plea to the most serious charge, other counts of theft, computer crime and tax evasion were dismissed.
He will face a period of probation and court-ordered restitution of $1,303,502.14 when he is sentenced on January 4, prosecutors said.
CALL 7 asked state liquor enforcement officials if they were accusing the largest liquor store in the state of Colorado of not following the rules.
"Exactly," answered State Liquor Enforcement Director Laura Harris.
Hani Sawaged’s two brothers pleaded guilty earlier this year in connection with the case.
Ghassan D. Sawaged, 57, and Bassam D. Sawaged, 48, pleaded guilty to theft and failure to file a tax return. They are serving a one-year deferred judgment sentence and have been ordered to jointly pay $200,000 in restitution for their role in the scheme.
"These individuals have created two very successful liquor stores who we believe have gained an unfair economic advantage in this marketplace," said Harris in 2009.
Prosecutors said an investigation by the City of Thornton Auditor’s Office, the Thornton Police Department and the Colorado Department of Revenue found that from at least January 2007 through August 2008, Sawaged and his brothers logged fictitious merchandise returns and took $5.4 million dollars in cash from Daveco Liquors. The result of this activity was underreporting and underpaying sales tax to the City of Thornton and to the Colorado Department of Revenue causing losses in excess of $1 million dollars.
The additional amount of restitution reflects additional underreported sales tax, interest and the cost of prosecution, prosecutors said.
In a statement sent to 7NEWS after the investigation became public, Daveco's said the charges were off base.
"The allegations by the Liquor Division revolve around two areas: cash payments to suppliers and interests in multiple licenses. These charges do not have merit and are plainly off base," the statement said. "With respect to charges involving multiple licenses, the Division is charging these liquor establishments with violating several vague and unclear laws. These laws are so vague that the Division was advised by its own attorney 16 years ago in 1993 that its regulations fall short of clarifying forbidden interests in licenses and that the Division could effectuate its concerns through the state rulemaking process."