Washington, D.C. - United States Attorney Kenneth L. Wainstein and Rick A. Raven, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, announced that Jose Tavares, 38, of Chevy Chase, Maryland, formerly of Washington, D.C., pleaded guilty today before the Honorable John Facciola, United States Magistrate Judge, to one count of Willful Failure to File a Return. Tavares faces a statutory penalty of up to 1 year of imprisonment, a $25,000.00 fine, an order of restitution for the tax due and owing in the amount of $31,454.74, and 1 year of supervised release. Further, under the U.S. Code, a defendant in a criminal tax case may also be ordered by the court to pay the costs of prosecution. Pursuant to the U.S. Sentencing Guidelines, Tavares faces a period of incarceration of 6 to 12 months. Sentencing is scheduled for December 17, 2004.

According to information presented to the Court by Assistant U.S. Attorney Sherri L. Schornstein, at all times relevant to the case, Tavares was a resident of the District of Columbia. Tavares was a self-employed masseur and an owner of two American Bodyworks Centers (ABC), located at 2026 P Street, N.W., Washington, D.C. and 1610 Wisconsin Avenue, N.W., Washington, D.C. ABC was a massage business, which advertised in The Washington Blade and in The City Paper. Several masseurs and masseuses worked at each location.

Tavares had not filed federal income tax returns for tax years 1998 and 1999. Under the Internal Revenue laws, absent an extension to file, a federal income tax return is due to be filed no later than April 15th of the year following the calendar tax year for which the return is filed.

Tavares had gross income in each of the tax years, 1998 and 1999, far in excess of the minimum which triggers the requirement to file Federal income tax returns. At all times relevant, Tavares controlled a bank account at SunTrust Bank, which was a checking and a merchant account. ABC’s customers’ credit card transactions were credited to Tavares’s SunTrust account. In addition, there were cash and checks deposited into the account. A review of bank records indicated that Tavares’ average monthly deposits were $21,251.04 to the ABC bank account for years 1998 and 1999. The masseurs who worked for ABC were independent contractors who split gross receipts 50/50 with ABC. For these same years, Tavares’ total income for the two-year period was determined to be $157,273.72. This figure includes approximately fifty percent of gross revenue at ABC and fifty percent of certain rents which were determined to be gross income of Tavares. The Internal Revenue Service has no record of Tavares filing tax returns for the tax years in question.

In announcing the guilty plea, U.S. Attorney Wainstein and Special Agent in Charge Raven commended the work of IRS Special Agent Delano Watkins and staff of the U.S. Attorney’s Office, including Legal Assistant Lisa Robinson and Assistant U.S. Attorney Sherri L. Schornstein, who is prosecuting the case.