Episode 11: From Garbage Man To Jailbird: His Career Took A Trashy Turn and He Took His CPA With Him Part II

Tax Crime Junkies

This episode reveals the shocking conclusion of the story of Wagdy Guirguis and his CPA Michael Higa. The IRS’s investigation of Hawaii Pacific Finance reveals that for nearly 12 years, Wagdy was having Michael divert funds to his personal accounts, amounting to $1.3 million. In an attempt to make it seem like he did not owe any taxes, Wagdy orders his bookkeeper to remove certain transactions from the records. In 2017, both Wagdy and Michael were indicted on multiple charges of tax evasion. In 2019, Wagdy was found guilty of all charges against him and sentenced to 5 years in prison, 3 years of supervised release and $3 million in restitution. In spite of Michael’s lawyer trying to pin everything on Wagdy, Michael ends up convicted on one count of filing false corporate income tax returns and is sentenced to 40 months in prison, 3 years of supervised release, and just over $2 million in restitution. Sadly, Michael was diagnosed with stage 4 kidney cancer and was granted compassionate early release. Additionally, Wagdy himself passed away while in prison at 79 years old.

Talking Points

• The IRS finds that from 2001-2012 Hawaii Pacific Finance was used to divert approximately 1.3 million dollars into Wagdy’s personal accounts
• Wagdy orders his bookkeeper to ‘clean up’ the balance sheet for Hawaii Pacific Finance and she declines; Michael instructs her exactly what she has to remove from the balance sheet while Wagdy watches over her shoulder as she is forced into doing his dirty work
• One of Wagdy’s employees at GMP gets called to testify before a grand jury and Wagdy tries to force her to sign a statement saying that he had no knowledge of any wrongdoing. She refuses and leaves her job that day.
• In August 2017, both Michael and Wagdy were indicted on multiple charges of tax evasion and conspiracy to defraud the government. They deny these charges. They are given a trial date of October 2018 and released on bond
• Wagdy seeks permission to go to the mainland for his wife’s double lung transplant treatment; This request is denied. Michael is faced with restrictions that clash with his work as a CPA
• Michael claims that Wagdy was to blame for everything and tries to have the charges against him dismissed. He then tries to get the case dismissed on the grounds that GMP is registered in Guam and that the US does not have jurisdiction over the tax returns. Section 6012 of the Internal Revenue Code shows this excuse is invalid.
• Wagdy and Michael have separate lawyers with different approaches to the defense. Michael’s lawyers continue to attempt to downplay his role at GMP and put it back on Wagdy
• In 2019, Wagdy is sentenced to 5 years in prison, 3 years of supervised release, and over $3 million in restitution. Michael is sentenced to 40 months in prison, 3 years of supervised release, and just over $2 million in restitution. GMP Associates and many of Wagdy’s other businesses are forced into involuntary dissolution
• At the end of 2020, Michael files for compassionate early release after being diagnosed with Stage 4 Kidney Cancer
• Just after Wagdy’s conviction, his wife passes away, and in March 2022, Wagdy dies in prison

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