DULUTH – The owner of several Canal Park souvenir shops was charged in federal court this week with failure to pay employment taxes and evasion of more than $800,000 in income taxes.
Duluth souvenir store owner charged with tax evasion
Charges say the owner failed to report more than $4 million in income.
September 5, 2020 at 1:11AM
Shimon Shaked, who has owned and operated the I Love Duluth store and three others in the city's popular tourist district, failed to report more than $4 million in income between 2013 and 2018, according to charges.
In 2012, Shaked formed a holding company under which he ran his various T-shirt and souvenir shops. He listed his daughter, who was 18 at the time, as the company's owner and reported the stores' income on her tax returns, charges said.
Charges said Shaked, 56, also did not report or pay any taxes on the shops' cash sales. They also said he used the company's bank account to cover personal expenses, such as child support and an attempt to open an alligator farm in Florida.
When reached by phone Thursday, Shaked declined to comment.
In addition to five counts of tax evasion, Shaked faces 14 federal charges for allegedly avoiding employment taxes by giving workers their wages in cash off the books.
He faces one additional charge for allegedly not filing a tax return in 2018 after he opened two more souvenir stores in Michigan.
The case is being prosecuted by the U.S. Attorney's Office and was investigated by the Internal Revenue Service. Shaked made his initial appearance before a federal judge in Minneapolis on Thursday.
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