Grocery owners make first appearance on tax charges
ILLMAR — The owners of the La Michoacana grocery store in Willmar, who each face 16 felony counts for failing to file tax returns, filing false tax returns and allegedly not paying more than $290,000 in state income and sales taxes, made their first appearance in court Wednesday.
Juan Carlos Mejia, 43, and Martha A. Mejia, 42, of Long Prairie, were both released on their personal recognizance. Each is scheduled to appear next on June 23 in Kandiyohi County District Court.
According to the charges against the couple, they operate grocery, restaurant and money transfer businesses in Willmar and Long Prairie, have been in business for at least 10 years and had a third location in Melrose that closed in 2009.
The investigation by the State Department of Revenue began when a tipster reported to the department that several grocery stores, including the La Michoacana store, were suspected of not following tax and business regulations.
The tip led to a review of the Mejias’ income tax history, which showed that their business generated more than $1 million in revenue per year, but they paid little or no taxes because little or no taxable income was reported.
The investigation revealed that the couple didn’t file an income tax return for 2011 and a sales tax audit showed they underreported taxable sales by not reporting revenue from selling phone cards.
The state’s investigation, including evaluation of the tax returns that were filed by the couple, cash register tapes, bank and lending documents and documents from the couple’s financial representative, showed that the couple owes allegedly more than $238,000 in income taxes and $52,000 in sales tax for the years 2008 to 2011.