Madison County Business Owner Sentenced on Tax Evasion and Theft Charges

NASHVILLE, Tenn. - The Department of Revenue’s Special Investigations Section conducted the investigation that led to the indictment and subsequent guilty plea of Ali N. Dhalai to one count of sales tax evasion and one count of theft of property over $60,000. On April 29, 2008, Dhalai, former President of ADF Inc., 935 Hollywood in Jackson, Tenn., was sentenced to two years supervised probation for the tax evasion charge and three years supervised probation for the theft charge. Both sentences are to run consecutively.

According to the indictment, Dhalai failed to declare taxable sales of $1,877,325 and did not remit $162,368.94 in sales tax collected from April 1, 2003 to Dec. 31, 2004. On April 29, 2008, Judge Roy B. Morgan Jr. ordered Dhalai to pay $162,368.94 in restitution to the state and sentenced him to five years supervised probation. Additionally, civil taxes, penalties and interest will be due the state.

“The majority of businesses pay appropriate taxes,” said Revenue Commissioner Reagan Farr. “This case serves as a warning to others who think they can get away with tax fraud in Tennessee. We will continue to pursue criminal activity and prosecute tax evaders to maintain fairness in our tax structure for Tennesseans.”

This case was pursued criminally by the department in cooperation with the Madison County District Attorney General Jerry Woodall’s Office. Citizens who suspect violations of Tennessee’s revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).