Owner of Tacos Guaymas restaurants charged with felony theft

Salvador Sahagun is accused of using software to avoid paying $5.6 million in taxes.

The owner of a string of Mexican restaurants in Snohomish and King counties is facing felony theft charges after audits allegedly turned up evidence he’s stolen more than $5.6 million in state taxes using software that partially masked his commercial success.

The case was built in part on state employees going undercover on 35 occasions to order lunches and dinners, according to documents filed this week in Snohomish County Superior Court.

Salvador Sahagun, 57, of Bothell, used sales-suppression software at six Tacos Guaymas restaurants he operates at locations in Marysville, Lynnwood and Seattle to avoid paying appropriate taxes, according to the state Attorney General’s Office.

Sahagun is charged with two counts of first-degree theft and one count of unlawful use of sales-suppression software. The felonies carry with them potential prison time and steep fines.

The case marks only the second time state prosecutors have brought tax-theft charges on behalf of the state Department of Revenue for alleged use of sale-suppression software, the agency’s communications manager, Anna Gill, said Thursday. The earlier case involved a Bellevue restaurant and nearly $400,000 in stolen taxes.

Restaurants and other businesses in Washington are required to report their gross receipts from retail sales and to pay the appropriate taxes on those transactions, Andrew Hamilton, an assistant state attorney general, said in court papers.

An audit by the revenue department compared point-of-sale records for the restaurants with tax returns. The auditor “concluded that income from each of these restaurants had been substantially underreported,” Hamilton wrote.

The audit found that most sales receipts were missing from the restaurants’ records and that led to suspicions that Sahagun was using the software.

Sales-suppression software, Hamilton explained in court papers, allows a business to conduct a transaction for say $50 while recording that only $10 traded hands. The software also can delete evidence of a sale.

“To determine whether such software was in use at these restaurants, a number of (state revenue department) employees acting in an undercover capacity went to the various restaurants where they paid cash for meals,” Hamilton wrote.

The 35 visits occurred in 2015. When the investigators checked the receipts against the restaurant records, they found several that correctly matched the transactions but others that did not, the prosecutor said. The auditor and a specialist determined there was evidence of sales-suppression software being used, the charging papers say.

Such software is illegal to possess and use in Washington. An Everett man was prosecuted federally in 2016 for selling revenue-suppression software made by a Canadian company.

In this case, the underpaid taxes reportedly added up to millions of dollars, the state contends. At the Lynnwood restaurant, the stolen taxes amounted to about $43,000, but in Marysville, it totaled more than $1.9 million, the documents say.

Sahagun told the auditor he runs each of the restaurants, including gathering the cash and reviewing the previous day’s sales, documents say.

“This is the second-ever prosecution from my office and the second-ever in Washington state for this relatively new type of scheme,” state Attorney General Bob Ferguson said. “Sales suppression software helps dishonest businesses steal from Washington taxpayers, and puts honest businesses at a competitive disadvantage. My office is committed to stopping tax cheats who siphon funding from our schools, parks and emergency services.”

Scott North: 425-339-3431; north@herald net.com. Twitter: @snorthnews.


In consideration of how we voice our opinions in the modern world, we’ve closed comments on our websites. We value the opinions of our readers and we encourage you to keep the conversation going.

Please feel free to share your story tips by emailing editor@bothell-reporter.com.

To share your opinion for publication, submit a letter through our website https://www.bothell-reporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) We reserve the right to edit letters, but if you keep yours to 300 words or less, we won’t ask you to shorten it.

More in News

File photo
State Supreme Court strikes down $30 car-tab initiative

Justices unanimously agreed that voter-approved Initiative 976 is unconstitutional.

A suspect in a carjacking hangs almost 60 feet up in a tree after climbing it to avoid police on Wednesday, Oct. 14, 2020 near Mill Creek, Wa. (Olivia Vanni / The Herald)
After gunfire, Bothell carjacking suspect climbs a tree

He allegedly passed a trooper at 114 mph on a motorcycle, crashed, stole a car, fled gunshots and climbed 60 feet.

Hilary Franz (left) and Sue Kuehl Pederson
Wildfires, forest health are key issues in race to lead DNR

Republican Sue Kuehl Pederson is challenging incumbent Commissioner of Public Lands Hilary Franz.

power grid electricity power lines blackouts PG&E (Shutterstock)
State extends moratorium on some electric, gas shutoffs

Investor-owned electric and natural gas utilities in WA can’t disconnect customers through April.

Cecil Lacy Jr. (Family photo)
Court: New trial in case of man who told police ‘Can’t breathe’

Cecil Lacy Jr. of Tulalip died in 2015 while in police custody.

A Sept. 10 satellite image shows smoke from U.S. wildfires blanketing the majority of the West Coast. (European Space Agency)
University of Washington professors talk climate change, U.S.-China relations

Downside for climate policy supporters is it can risk alienating moderate or right-leaning voters.

Sightseers at a Snoqualmie Falls viewpoint adjacent to the Salish Lodge & Spa on Feb. 19, 2020. Natalie DeFord/staff photo
25 COVID cases linked to Salish Lodge

Public Health is urging anyone who visited the lodge to monitor for symptoms or get tested.

The nose of the 500th 787 Dreamliner at the assembly plant in Everett on Sept. 21, 2016. (Kevin Clark / Herald, file)
Report: Boeing will end 787 Dreamliner production in Everett

Boeing declined comment on a Wall Street Journal story saying the passenger jet’s assembly will move to South Carolina.

Car hits hydrant and power pole in Bothell

Luckily there were no injuries

Washington State Capitol Building in Olympia. File photo
Surge in consumer spending eases state budget challenges

A jump in tax collections cuts a projected $9 billion shortfall in half, acccording to new forecast.

Rendering of the completed boathouse. Courtesy photo/City of Kenmore
Kenmore project will bring public rowing to Rhododendron Park

The project will create a boathouse for both public and school district use

High speed rail and hub cities explored in Cascadia Corridor study

A new paper outlines a potential plan for the region.