The owner of an unregistered marijuana business in Colorado Springs has admitted to not paying more than $3 million in federal taxes.
Andrew Poarch, 31, pled guilty to filing a false income tax return Feb. 13 in U.S. District Court Judge Robert Blackburn’s courtroom, according to a Wednesday press release from U.S. Attorney Jason R. Dunn’s office.
Poarch and his wife, who was not named, opened The Lazy Lion in Colorado Springs around January 2013, the release stated, citing the plea agreement.
The couple owned and operated the cash-only business until August 2016.
“Customers could go to the store and join a private club by signing a customer agreement,” the release stated. “The Lazy Lion member agreement allowed for members to visit the business and acquire marijuana for a set price.”
Members paid a one-time initial fee, followed by an entry fee on subsequent visits, the release stated.
“The Lazy Lion obtained its supply of marijuana from a series of grow operations which cultivated and prepared the marijuana for distribution at various warehouses located in the Colorado Springs area,” it stated. “Poarch and his wife owned and controlled the growing operations.
“Once the marijuana was received at The Lazy Lion, customers could enter the business, purchase marijuana, and if desired, consume the marijuana on the premises.”
The business was not registered as a recreational dispensary in the state of Colorado.
“The Lazy Lion generated substantial profits during the course of its operations,” the release stated. “In order to track its cash revenues, the company used a point of sale program that recorded the receipt of all cash funds collected from customers at the business.”
Federal agents with the Internal Revenue Service’s criminal investigation division used records from the point of sale system to determine the gross revenues for the business were about $10,792,320 while it operated.
“Federal agents then determined the business expenses and the income,” the release stated. “On or about Sept. 29, 2015, Poarch and his wife signed a Form 1040, Individual Income Tax Return, signed under penalties of perjury, and represented that, to the best of their knowledge, the information contained in the return was true, correct, and complete.
“Among other information, the 2014 tax return stated that their adjusted gross income was $19,294 and that they were due a refund from the IRS. In fact, Poarch was aware that their adjusted gross income was approximately $2,807,761 and the couple owed the IRS tax of $1,061,485.”
The couple didn’t file personal income tax returns for 2015 or 2016, according to the release.
“Their net income for the 2015 tax year was $4,187,449,” it said. “Their net income for the 2016 tax year was $1,325,575.”
Altogether, Poarch and his wife did not pay $3,126,245 to the IRS, the release stated.
Poarch is scheduled to be sentenced May 22; no additional information was provided about his wife.
Assistant U.S. Attorney Tim Neff is prosecuting the case.