Bogus Tax Reaps Easy Money

How would you feel if you found out that the grocery store where you shop had been charging you a non-existent sales tax for the last 10 years? The fictitious sales tax was pure profit for the store and wasn't remitted to any taxing authority. The store's profit margins exceeded those of similar stores operating honestly and probably earned nice bonuses for the managers involved in the fraud.

That's what happened in this case although on a much larger scale. A confidential source told U.S. Secret Service agents that International Catering Services (ICS), an airline catering company, was charging airline companies at the Elmville International Airport, a 4.55 percent port fee and 6 percent state sales tax on those fees. The problem was that the port fee had been eliminated at the Elmville airport 10 years ago. It appeared that ICS was pocketing all of the port fees.

The airlines believed that the port fee at Elmville, like the port fees at many other airports, was a legitimate tax imposed by the airport authority. According to catering and airline industry officials, business negotiations historically had been conducted in a spirit of trust and confidence in the honesty and integrity of all parties. To err is human; to intentionally err for financial gain is fraud.