Nome woman indicted on tax evasion
By Diana Haecker
A grand jury in Anchorage indicted Nome and Anchorage businesswoman Tina Yi on five counts for tax evasion and five counts for filing false tax returns that underreported income from the business she owned in Nome, SJ Investment LLC.
The indictment document was made public on November 3 and details allegations that Yi evaded taxes in the amount of $1.5 million in federal income taxes and filed false personal tax returns.
According to court documents, Yi was the sole owner of SJ Investment LLC, doing business as Polaris HBL, Polaris hotel, bar, liquor store and separate properties with rental apartments. Yi and her husband managed and worked at the Polaris HBL from 2007 until the building burned down on Oct. 31, 2017. The fire not only totaled the building, but also claimed the lives of tenant Bette Ann Haugen and her little dog. The Nugget reported at the time that insurance adjusters pegged the loss of the 34-room hotel, bar and liquor store with inventory at $4.5 to $5 million.
According to the U.S. District Attorney’s office, Yi allegedly maintained two sets of books and records relating to the business’s income and expenses for 2014 through 2017. One set of books accurately captured SJ Investment’s income and expenses, and the other one understated the company’s income, which she provided to her tax preparer to file IRS tax returns. By allegedly providing business records to her accountant that falsified SJ Investment’s income, Yi ensured that her personal tax returns – on which she reported SJ Investment’s income – would be false for each year. For 2018, Yi used a different tax preparer. Allegedly, she provided that preparer with false information as well, ensuring that her 2018 tax return also was false.
Following the fire, a CPA contacted Yi on behalf of the insurance company to determine the loss of business income suffered on account of the fire. Yi allegedly turned in business records recording higher gross receipts than reported in her tax returns to the IRS. Yi received about $1.8. million from the insurance spread out over five checks, deposited between November 2017 and March 2018.When Yi’s CPA advised her that she needed to report both the fire loss and the insurance payout to the IRS, Yi used a different CPA to prepare her 2017 tax return. Court documents say that Yi provided false and incomplete information to both CPAs who “relied on her to provide true and complete information in order to accurately prepare her income tax returns.”
The indictment states that “For tax years 2014 through 2018, Tina Yi attempted to and did evade and defeat the assessment of more than $1.5 million in federal income tax by failing to report to the IRS more than $3.2 million in business income on her income tax returns.”
The empty lot where once the Polaris Hotel and bar stood was sold, with its liquor license, in 2020 but SJ Investment LLC still owns two rental properties in Nome.
City Clerk Bryant Hammond said that SJ Investment LLC has not paid the city’s property tax on those rental properties since 2019 and owes the city $23,537.76.
On Nov. 2 Tina Yi appeared before U.S. Magistrate Judge Matthew M. Scoble of the U.S. District Court for the District of Alaska. She Yi entered denials and pleas of not guilty to the allegations and charges in the indictment during the arraignment. Her attorney Christy Lee of Anchorage said in a statement to The Nome Nugget: “Tina Yi loves the Nome Community. Her entire life was destroyed in the 2017 accidental fire that killed her tenant, her dog, and destroyed all her financial records. The Community needs to keep in mind that the charges against Tina are only allegations. Tina is not guilty unless proven otherwise. Tina is confident that the facts will corroborate her innocence.”
Yi’s next court appearance date has not yet been set.
According to a press release from the U.S. Attorney for the District of Alaska, if convicted, Yi faces a maximum of five years in prison for each of five counts of tax evasion and three years in prison for each of five counts of filing a false tax return.
The IRS-Criminal Investigation unit was investigating the case.