UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

PORTLAND DIVISION 

UNITED STATES OF AMERICA Case No. 3:15-CR- DO \ L/ 0 ·=JD 

v. 

DA YID G. KIRAZ, 

GEORGE D. KIRAZ, 

DANIEL G. KIRAZ, and 

MARCI K. KIRAZ, 

Defendants. 

INDICTMENT 

18 U.S.C. § 371, Conspiracy to Defraud the 

U.S. 

26 U.S.C. § 7206(1), Making and 

Subscribing False Federal Income Tax 

Returns 

26 U.S.C. § 7206(2), Aiding and Assisting in 

the Preparation and Filing of False Tax 

Returns 

THE GRAND JURY CHARGES: 

General Allegations 

At all times relevant to this Indictment: 

I. Cabaret Lounge was an adult entertainment business, commonly called a strip club, 

located at 503 W Burnside Street, Portland, Oregon. 

2. Cabaret Lounge II was an adult entertainment business, commonly called a strip club, 

located at I 7 544 SE Stark Street, Gresham, Oregon. 

3. Cabaret Lounge and Cabaret Lounge II (collectively referred to below as "the 

businesses") took in revenue from food and beverage sales, lottery machine 

commissions, ATM fees, door charges (also called cover charges), aud house fees 

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(also called stage fees) charged to dancers for use of the facilities and as penalties for 

infractions such as being late for a shift. 

4. Defendant DAVID G. KIRAZ, a resident of Happy Valley, Oregon, owned and 

operated Cabaret Lounge and Cabaret Lounge II. Defendant DAVID G. KIRAZ 

reported the business activity of Cabaret Lounge and Cabaret Lounge II on his federal 

individual income tax returns using an IRS form called a Schedule C "Profit or Loss 

From Business". 

5. Defendant GEORGE D. KIRAZ, a resident of Estacada, Oregon, and Portland, 

Oregon, was the father of defendant DAVID G. KIRAZ. Defendant GEORGE D. 

KIRAZ exercised operational control over Cabaret Lounge and Cabaret Lounge II 

and participated in the hiring, training, and firing of employees and in the disposition 

of revenue from the businesses. 

6. Defendant DANIEL G. KIRAZ, a resident of Portland, Oregon was the brother of 

defendant DA YID G. KIRAZ and son of defendant GEORGE D. KIRAZ. Defendant 

DANIEL G. KIRAZ participated in the management of Cabaret Lounge and Cabaret 

Lounge II, the hiring, training, and firing of employees, and in the bookkeeping for 

Cabaret Lounge and Cabaret Lounge II. 

7. Defendant MARCI K. KIRAZ, a resident of Happy Valley, Oregon, was the wife of 

defendant DAVID G. KIRAZ. Defendant MARCI K. KIRAZ participated in the 

bookkeeping for Cabaret Lounge and Cabaret Lounge II. 

8. The IRS is an agency of the United States Department of Treasury responsible for 

administering and enforcing the tax laws of the United States and collecting taxes 

owed to the United States Treasury. 

Indictment Page 2 

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COUNT ONE 

[18 U.S.C. § 371 - Conspiracy to Defrand the United States] 

Paragraphs 1-8 of the General Allegations are incorporated herein. 

OBJECT OF THE CONSPIRACY 

9. Beginning on or about January 1, 2007 and continuing up to and including April 15, 

2011 within the District of Oregon, and elsewhere, defendants DAVID G. KIRAZ, 

GEORGE D. KIRAZ, DANIEL G. KIRAZ, and MARCI K. KIRAZ, and others 

known and unknown to the grand jury, unlawfully and knowingly combined, 

conspired, confederated, and agreed together to defraud the United States by deceitful 

and dishonest means by impeding, impairing, obstructing, and defeating the lawful 

government functions of the IRS, an agency of the United States, in the 

ascertaimnent, computation, assessment, and collection of revenue, that is, federal 

individual income taxes. 

MANNER AND MEANS OF THE CONSPIRACY 

10. Defendants DAVID G. KIRAZ, GEORGE D. KIRAZ, DANIEL G. KIRAZ, and 

MARCI K. KIRAZ and others known and unknown to the grand jury, carried out 

their conspiracy using the following manner and means, among others: 

Indictment 

a. The defendants required customers to pay door charges in cash and required 

dancers to pay house fees in cash. 

b. At the end of each business day, the defendants caused the door charge cash and 

the house fee cash to be separated from cash generated by food and beverage sales 

and lottery sales. 

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c. One of the defendants personally picked up the door charge cash and the house 

fee cash and removed this cash from the businesses so the defendants could use 

this cash for their personal benefit. 

Indictment 

d. The defendants directed and/or caused daily records of the receipts of the 

businesses, including the door charge cash and the house fee cash, to be destroyed 

on a regular, ongoing basis. 

e. The defendants directed and/or caused the amount ofreceipts from food and 

beverage sales and from lottery sales to be accurately input into a profit and loss 

spreadsheet maintained on a computer at both Cabaret Lounge and Cabaret 

Lounge II but directed and/or caused the daily door charge receipts and the daily 

house fee receipts not to be input on these profit and loss spreadsheets. 

f. To keep track of the amount of door charge receipts and house fee receipts the 

defendants took from the businesses for their personal benefit, the defendants 

maintained a second profit and loss spreadsheet on the personal computer of 

defendant DA YID G. KIRAZ, at his residence, on which the defendants 

accurately recorded the daily door charge receipts and house fee receipts from the 

businesses. 

g. The annual business activity of Cabaret Lounge and Cabaret Lounge II was 

reported on the federal income tax returns of defendant DA YID G. KIRAZ using 

a Schedule C. Each year, so that a paid tax return preparer could prepare the 

federal income tax return of defendant DA YID G. KIRAZ, the defendants gave 

the tax return preparer a copy of an annual profit and loss spreadsheet for Cabaret 

Lounge and Cabaret Lounge II that did not include most of the door charge 

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receipts and most of the house fee receipts each of the businesses had collected in 

the prior tax year. The defendants' intentional omission of most of the door 

charge receipts and most of the house fee receipts caused the paid return preparer 

to create a Schedule C to report the receipts and expenses of the businesses that 

omitted most of the door charge receipts and most of the house fee receipts for 

that tax year. 

h. Each year, defendant DAVID G. KIRAZ signed and filed with the IRS a federal 

individual income tax return he knew included a false Schedule C that omitted 

most of the businesses' door charge receipts and house fee receipts for that tax 

year. 

1. As a result of defendant DAVID G. KIRAZ knowingly and intentionally filing 

federal individual income tax returns for 2007, 2008, 2009, and 2010 that omitted 

most of the businesses' door charge receipts and house fee receipts, defendant 

DAVID G. KIRAZ underreported his personal taxable income by a total of 

approximately $1,501,874, causing a total income tax underpayment of$519,503. 

OVERT ACTS IN FURTHERANCE OF THE CONSPIRACY 

11. In furtherance of said conspiracy and to effect the objects thereof, between January 1, 

2007 and April 15, 2011, defendants DAVID G. KIRAZ, GEORGE D. KIRAZ, 

DANIEL G. KIRAZ, and MARCI K. KIRAZ and others known and unknown to the 

grand jury, committed the following overt acts, among others, in the District of 

Oregon and elsewhere: 

Indictment 

a. The defendants themselves destroyed daily records of the receipts of the 

businesses and directed and/or caused others to destroy daily records of the 

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receipts of the business, each such destruction of records being a separate overt 

act. 

b. The defendants maintained a second profit and loss spreadsheet on the personal 

computer of defendant DAVID G. KIRAZ, at his residence, on which the 

defendants accurately recorded the daily door charge receipts and house fee 

receipts from the businesses, each such recording being a separate overt act. 

c. Each tax year, the defendants gave a paid tax return preparer inaccurate 

information about the receipts of the businesses, each such occurrence being a 

separate overt act. 

d. In 2008, 2009, 2010, and 2011, defendant DAVID G. KIRAZ filed federal 

individual income tax returns for 2007, 2008, 2009, and 2010, respectively, that 

omitted most of the door charge receipts and house fee receipts of the businesses, 

the filing of each such false tax return being a separate overt act. 

All in violation of 18 U.S.C. Section 371. 

COUNTS TWO Through FOUR 

[26 U.S.C. § 7206(1)- Filing False and Fraudulent Income Tax Returns] 

Paragraphs 1-8 of the General Allegations are incorporated herein. 

1. On or about the dates identified below, in the District of Oregon, defendant DAVID 

G. KIRAZ did willfully make, subscribe, and file with the Internal Revenue Service, 

a U.S. Individual Income Tax Return, Form 1040 for the calendar years identified 

below, each of which was verified by a written declaration that it was made under the 

penalties of perjury and which he did not believe to be true and correct as to every 

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material matter and that he then and there knew and believed said items, identified 

below, were false and fraudulent: 

RETURN DATE 

COUNT YEAR FILED FALSE ITEM & FALSE AMOUNT REPORTED 

2 2008 08/17/2009 Schedule C, "Gross Receipts or Sales", $1,976,750 

3 2009 03/29/2010 Schedule C, "Gross Receipts or Sales", $1,830,915 

4 2010 03/18/2011 Schedule C, "Gross Receipts or Sales," $1,500,137 

All in violation of26 U.S.C. Section 7206(1). 

COUNTS FIVE through SEVEN 

(26 U.S.C. § 7206(2) - Aiding and Assisting in the Preparation and Presentation of False 

and Fraudulent Income Tax Returns] 

Paragraphs 1-8 of the General Allegations are incorporated herein. 

1. On or about the dates identified below, in the District of Oregon, defendants 

GEORGE D. KIRAZ, DANIEL G. KIRAZ, and MARCI K. KIRAZ did willfully aid 

and assist in, and procure, counsel, and advise the preparation and presentation to the 

Internal Revenue Service, ofa U.S. Individual Income Tax Return, Form 1040 of 

David G. Kiraz for the calendar years identified below. The returns were false and 

fraudulent as to a material matter, in that, as the defendants then and there knew and 

believed, the returns reported false amounts of"Gross Receipts or Sales" on a 

Schedule C as identified below: 

RETURN DATE 

COUNT YEAR FILED FALSE ITEM & FALSE AMOUNT REPORTED 

5 2008 08/7/2009 Schedule C, "Gross Receipts or Sales", $1,976,750 

6 2009 03/29/2010 Schedule C, "Gross Receipts or Sales", $1,830,915 

7 2010 03/18/2011 Schedule C, "Gross Receipts or Sales", $1,500,137 

All in violation of26 U.S.C. Section 7206(2). 

Indictment Page 7 

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Dated thist day of April 2015. 

Presented by: 

S. AMANDA MARSHALL 

SETH D. URAM, DC# 376214 

Assistant United States Attorney 

Indictment 

A TRUE BILL. 

OFFICIATING FOREPER~ 

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