Owner of Auburn bikini barista coffee stands is going to jail

The owner of bikini barista coffee stands in Auburn was sentenced to 30 days in prison, a $5,000 fine and 100 hours of community service for tax fraud this week. US Attorney Tessa Gorman announced Rajesh Mathew, 45, pleaded guilty to filing a false tax return and underreporting income over several years.

Mathew has already paid restitution to the IRS and may face additional civil penalties, fines and interest. Filing a false tax return can result in up to three years in prison and a $250,000 fine or twice the gain or loss from the offense.

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During the sentencing, US District Judge Tana Lin emphasized the gravity of tax fraud, stating, “There is no excuse for hiding half a million dollars in a life of privilege, except greed.”

Lin dismissed the defense’s request for home confinement, asserting it would not adequately reflect the seriousness of the crime.

This sentencing marks the first in a series of tax fraud cases involving a family that owns multiple coffee stands. Mathew’s brother-in-law, Assad Baragzai, 47, also from Auburn, admitted in August 2024 to failing to report up to $6 million in income between 2016 and 2020. Baragzai faces up to three years in prison, with his sentencing scheduled for November 18, 2024.

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“Most Americans pay their taxes voluntarily and on time,” Assistant US Attorney Michael Dion said, advocating for a four-month prison sentence for Mathew. “The root of the tax evasion problem lies with a small minority who refuse to pay what they owe. “Raj Mathew is one of those people.”

The IRS Criminal Investigation group is examining the case.

Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X, formerly known as Twitter, here and email him here.