Portland strip club owners found guilty of defrauding IRS pay remaining fees

PORTLAND Ore. (KPTV) – The former owners of popular Portland-area strip clubs Cabaret Lounge and Cabaret Lounge II have paid full restitution after attempting to defraud the IRS, according to the Oregon District Attorney’s Office.

According to court documents, David Kiraz, 40, of Happy Valley, his father and brother George Kiraz, 62, and Daniel Kiraz, 37 of Portland, operated the two clubs. Authorities say between 2007 and 2010, the clubs collected more than $1.5 million in cash for cover charges and dancer stage fees.

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During this time, the Kiraz’s kept books at their clubs not including cash payments. A second set of books at David Kiraz’s home tracked actual receipts in full.

According to the Oregon D.A.’s Office, the Kiraz’s reported their business activity on David Kiraz’s personal income tax return and provided their tax return preparers with only a two-page business financial summary compiled from their manipulated records. This resulted in more than $1.5 million in taxable income unpaid and a federal tax loss of $649,000.

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In April 2015, a federal grand jury issued a seven-count indictment against the Kiraz’s. All three were sentenced following a six-day trial in Oct. 2016. David and George Kiraz were sentenced to three years in federal prison and three years of supervised release. Daniel Kiraz was sentenced to one year and one day in federal prison.

The Clerk of the Court for the District of Oregon says a full payment of the remaining restitution, $608,217, was paid in full on Sept. 23. The total restitution order was $657,243.

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