Adult Entertainment Execs Face Jail for Cheating IRS

Sep 30, 2011 8:00 AM PST

ANAHEIM, Calif. — Two proprietors of “live adult entertainment for cash-paying customers” could get jail time for cheating the IRS.

Authorities said Oscar Macias, 36, and Catherine Shihad, 34, who ran Universal Media Management pleaded guilty to falsifying their 2004 tax returns.

The prosecutor in the case, Assistant United States Attorney Angela J. Davis, told XBIZ that the defendants operated a business where they advertised in newspapers and sent out women to cash-paying clients' residences for services including lap dances.

The Anaheim residents reportedly failed to pay taxes on their full income and their company’s income totaling $140,000.

Macias admitted in his plea agreement filed in federal court in Los Angeles on Monday, that he did not report revenue totaling about $33,000 during the 2003-05 tax years and pleaded guilty to filing a false individual tax return.

According to Department of the Treasury special agent Linda Lowery, Shihad directed her tax preparer to file a federal corporate income tax return for the fiscal year ending Sept. 30, 2004 that contained false information.

The pair face a maximum of three years in federal prison and a fine of $250,000 if convicted.

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