Bergen County Auto Body Shop Owner Faces Prison After Admitting to $230K Tax Evasion Scheme
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the staff of the Ridgewood blog
Fair Lawn NJ, A Fair Lawn business owner is facing serious federal prison time after pleading guilty to a multi-year scheme to dodge federal income and payroll taxes. Kfir Baroan, 50, admitted to evading more than $233,000 in taxes between 2018 and 2021, according to an announcement by U.S. Attorney Robert Frazer.
The case serves as a stark reminder that the IRS is cracking down on “off-the-books” business operations in North Jersey.
The Scheme: $1.5 Million in Cashed Checks and “Under the Table” Payments
According to court documents and statements made in Newark federal court, Baroan operated a Bergen County auto body shop but bypassed standard financial reporting for years. The investigation revealed several sophisticated methods used to fly under the IRS radar:
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Cashing Out: Baroan cashed over $1.5 million in business receipt checks at check-cashing facilities rather than depositing them into traditional business accounts.
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Hidden Accounts: He allegedly used bank accounts associated with other businesses to deposit cash and withdraw funds for personal and business expenses.
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Payroll Fraud: Baroan paid his employees in cash, failing to report their wages or withhold required federal taxes.
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Missing Returns: From 2018 to 2021, Baroan failed to file any income tax returns despite earning significant revenue.
What Are the Penalties?
Baroan pleaded guilty on April 23, 2026, to tax evasion and the willful failure to pay over payroll taxes. Each charge carries heavy consequences:
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Prison Time: A maximum penalty of five years in prison for each charge.
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Hefty Fines: Up to $250,000 per charge, or twice the gross gain or loss from the offense—whichever is greater.
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Sentencing Date: U.S. District Judge Michael E. Farbiarz has scheduled sentencing for September 2, 2026.
U.S. Attorney Frazer credited the special agents of the IRS Criminal Investigation unit for their work in uncovering the financial discrepancies that led to the plea.
A Warning for Small Business Owners
This case highlights the risks of managing high-volume cash businesses without proper documentation. In 2026, federal investigators are increasingly utilizing advanced data tracking to identify business owners who utilize check-cashing services to avoid tax liabilities.
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After he’s found guilty, start the deportation proceedings.
Kfir is a Hebrew name you moron.
I am shocked to hear that someone actually got caught for this. I thought this was a common practice at many deli/pizza/bagel/food establishments. Hit ‘no sale’ when someone pays in cash, therefore not recording the sale. The money is ‘under the table’ and not included in revenue, will not be subject to tax. Cannot believe more businesses don’t get caught for this, as I see this happening on a daily basis.
Pretty sophisticated approach, surprised he got caught. Who would have thought not filing a return would ever raise suspicions.
Fairlawn home of the famous tax cutters!
That’s the business model of almost every contractor.
This story is antisemetic.
I’ve hired several contractors over the years. Every single one of them offered a discounted price for cash.
typical response is ‘if you pay by cash i wont charge the sales tax’.. so eff them i write a check.
Don’t forget, after all of this, he still has to pay the taxes and civil penalties.