5 Indicted in O.C. on Tax Evasion, Other Charges

The Orange County Grand Jury on Thursday unsealed indictments against five people on numerous felony charges, including money laundering and state income tax evasion in connection with a larger statewide case involving Medi-Cal fraud, authorities said.

Named in the indictments were Yakoob Habib, 55, and Rashida Kalia, 48, of Buena Park; Imran Igbal, 28, and Mohammad Shoaib, 35, of Fullerton; and Mohammed A. Tai, 52, of Cerritos.

Habib, Tai, Igbal and Shoaib were arraigned Thursday in Orange County Superior Court and entered pleas of not guilty, said Barry Gilbert, a spokesman for the California Franchise Tax Board, which participated in the case. Kalia, he said, is a fugitive.

According to Gilbert, the indictments involve several businesses owned or operated by the five in various combinations, including K-Tax Service, a tax preparation office in Anaheim; K&K; International Inc. in Bellflower; B.M. Stars and SNS Auto Sales, auto wholesale businesses in Santa Fe Springs and Bellflower respectively; and a money transmitting service called Kalia & Khanani.

Gilbert said the five are believed to owe more than $5 million in taxes, penalties and interest on more than $15 million in unreported income from 1999 to 2003.

“This is part of the franchise board’s attack on the tax gap ... the difference between the tax that’s owed and the tax that’s paid,” he said.

“Tax evasion is not a victimless crime -- it hurts everyone. This is a pretty important case [showing] that the Franchise Tax Board is actively pursuing tax cheats and tax evaders. We have zero tolerance in California.”

The Orange County case, according to Hallye Jordan, a spokeswoman for the state attorney general’s office, is part of a larger one involving 29 defendants statewide being prosecuted by the office’s Bureau of Medi-Cal Fraud and Elder Abuse.

“It’s part of a large investigation of medical fraud that’s been ongoing since 2001 and has resulted in some record sentences,” she said.

It was unclear Thursday just how the local cases are connected to the larger one.

According to a statement released by the Franchise Tax Board, Habib has been in Orange County Jail since December 2003, serving a three-year sentence for illegally transmitting money in a case also involving Surinder Singh Panshi, a former doctor sentenced to 16 years in prison for using Southern California clinic laboratories to cheat the Medi-Cal program out of millions of dollars.

Bail for Habib, Kalia and Tai was set at $2 million each, while Igbal and Shoaib had bail set at $500,000 each.