Bayport man charged with 74 tax crimes linked to vacation rental scam
A Bayport man is accused of running a business to rent out his properties on a short-term basis, with not reporting income to the state and refusing to return security deposits his tenants have paid.
Karl Auleciems, 54, is charged with 74 tax crimes and is charged with owing $ 194,961.43 in unpaid taxes, penalties and interest, according to the Minnesota Department of Revenue.
According to the criminal complaint, Auleciems ran an unregistered business called KEASons Enterprises, which he used as a middleman to lease his Lake Elmo property and other properties as short-term rentals.
The accusations say that on “several occasions” between 2017 and 2020, Auleciems rented the Lake Elmo property to people organizing special events with a large number of guests, such as weddings and family reunions.
He also rented an apartment above the garage at the Lake Elmo property, a cabin in Danbury, Wisconsin, and a property in Stillwater, according to the complaint.
He would advertise the properties on short-term websites such as VRBO, Airbnb, and FlipKey, but then complete the transaction with the tenant through his business. This allowed him to avoid websites while charging sales tax on rentals.
Auleciems is accused of failing to file tax returns and using tax returns and failing to pay sales tax for rentals between April 2017 and May 2020.
He and his wife also filed fraudulent individual tax returns and did not pay tax on actual income earned from 2015 to 2019, according to the charges. They reported $ 237,398 in rental income in those years when investigators found they had actually earned $ 633,629 on their rental properties in those years.
On top of that, the criminal complaint details a 2018 civil lawsuit between Auleciems and the town of West Lakeland. Several people who have rented the Lake Elmo property have testified in civil litigation that they found the Lake Elmo property on a third party rental website, then Auleciems, which was called “Ethan” or “Larry” , has always had tenants deal directly with KEAsons.
Renters made payments to KEAsons and never through the third party rental site. As part of their rental contracts, tenants were required to pay a security deposit. The deal said the deposit would be refunded within 90 days of departure, but it did not return them without an explanation or proof of damage, according to the statement of charges.
The charges indicate that through this “deceptive scheme” he stole $ 17,960 from the tenants.
Auleciems is charged with 34 counts of non-reporting of sales and use tax, 32 counts of non-payment or collection and remittance of sales and use tax, five counts charge of filing false or fraudulent individual tax returns and five counts of non-payment. personal income tax.
Each tax offense carries a maximum penalty of five years in prison and / or a fine of $ 10,000.
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