THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, September 1, 1994 TAG: 9409010575
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY LYNN WALTZ, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 89 lines
Edmund C. Ruffin, an Oceanfront civic leader and co-owner of two Virginia Beach nightspots, has been linked in federal court to a tax-evasion and fraud investigation that resulted in the January conviction of his business partner, Nabil D. Kassir.
Ruffin's name surfaced in federal court Wednesday as part of a sentencing agreement between prosecutors and Kassir. Under the agreement, prosecutors will ask a judge to fine Kassir about $15,000. Kassir will forfeit assets of $149,488 and pay $100,000 to the Internal Revenue Service.
In return for Kassir's providing information about Ruffin's activities, the agreement states, the government will try to avoid seizing any of Ruffin's assets in which Kassir holds an interest.
Kassir and Ruffin co-own Rogue's and Peabody's, two popular nightspots.
Officials declined to comment on the investigation, other than to say it was ``ongoing.'' Ruffin has not been charged, and prosecutors would not comment on his involvement in the case. Ruffin and his attorney were unavailable for comment Wednesday.
In January, a federal jury convicted Kassir of 25 felony counts, including conspiracy, mail fraud, money-laundering and filing false income tax returns. Prosecutors said Kassir skimmed profits from his businesses, hid proceeds in foreign bank accounts, underreported income and lied to Alcoholic Beverage Control officials about the volume of his liquor sales.
He was charged after investigators spent eight months taping together and analyzing shredded business records recovered from trash cans outside his office and home.
Ruffin's name appears in a document, made public in U.S. District Court on Wednesday, in which Kassir agreed to ``disclose all information known to him with respect to the activities of all other persons . . . relating to violations of federal criminal laws.''
In return for that promise, and for his waiver of all appeals in his tax-fraud convictions, prosecutors will recommend that Kassir receive a sentence of 21 to 27 months and serve his time in a minimum-security facility.
Wednesday's agreement protects Kassir from losing his assets if the government seizes any property owned by Ruffin. It does not indicate whether the federal government would want to do so or why. However, forfeiture of assets cannot proceed unless the defendant knew the assets were purchased with funds obtained illegally, federal authorities said.
To seize property in a criminal case, the government must prove beyond a reasonable doubt that the defendant knew money was derived from an illegal enterprise. In a civil forfeiture, the standards are less rigid. The government must prove the defendant had reasonable cause to believe the money came from illegal activities.
Ruffin is mentioned in two paragraphs of the 13-page cooperation agreement. It reads:
``If Nabil D. Kassir satisfies his obligations under the agreement, the United States Attorney's Office for the Eastern District of Virginia agrees to use its best efforts to satisfy any forfeiture of Edmund Ruffin that is obtained as a result of the cooperation of Nabil D. Kassir from assets in which Nabil D. Kassir has no interest as of the date of Mr. Kassir's conviction.
``The United States will use all reasonable efforts to satisfy any forfeiture of Edmund Ruffin by first looking to assets in which Nabil D. Kassir has no financial interest and then to assets in which Mr. Kassir has less than 10 percent interest, and then to assets in which he has a greater than 10 percent interest.''
Kassir's agreement exempted him from testifying against his brother, Farouk D. Kassir, who pleaded guilty Wednesday to one charge of willfully signing a false federal tax return.
Farouk Kassir admitted purchasing beer for Chicho's Restaurant at the Oceanfront, then selling it without recording profits on his tax returns. Farouk owned the bar with Nabil Kassir.
Documents filed in federal court Wednesday estimate that from 20 percent to 50 percent of beer purchases were ``off-ticket,'' or unrecorded cash purchases.
``By purchasing beer in currency off-ticket,'' the papers said, ``Farouk D. Kassir was able to understate his beer purchases and sales on the income tax returns for Chichos.'' The underreported income was about $13,000.
Ruffin has been an active member of The Resort Area Advisory Commission, a citizen panel appointed by City Council to oversee resort improvements and activities. He was an original appointee to the commission when it started in the early 1980s. His present term will expire Dec. 31, 1996. ILLUSTRATION: Photo
Edmund C. Ruffin
KEYWORDS: TAX EVASION FRAUD by CNB