City jewelers sentenced for tax evasion

Two brothers who run A&K Jewelers on Sansom Street in Philadelphia were sentenced today to serve seven and five months in prison for failing to pay some $211,000 to the IRS.

Berge Khatchadrian, 70, of Newtown Square, and Arthur Khatchadrian, 50, of Media, stopped filing their tax returns in 2002 when their jewelry business started earning less money, they conceded in U.S. District Court.

The older brother was sentenced to seven months in prison and seven months of home confinement, while his younger brother, a jewelry designer, received five months in prison and five at home.

Berge Khatchadrian said business dropped after the 9/11 terror attacks, and the brothers had significant family expenses, including caring for their mother and the family of a deceased brother.

Assistant U.S. Attorney Michele Morgan-Kelly said that "while many individuals experience finance hardship in their lifetimes, many do not try to 'solve' the issue by committing crime."

In court, Morgan-Kelly said that while the brothers were not paying taxes, they were sending children to private school and driving "very nice" cars.

Defense attorney Gerard P. Egan said the brothers are committed to repaying the government, and asked that they be given home confinement so they can continue working.

But U.S. District Court Judge Anita B. Brody said the American tax system is a voluntary system: "The big issue here is deterrence, we have to have teeth" to prevent others from flouting the law.

Except for their tax crimes, "you're basically good people" she said to the men, who had about a half-dozen friends and fellow jewelers, and their family priest, supporting them in the court room.

Berge Khatchadrian owes the government $111,878, and Arthur owes $89,723.

Brody delayed incarceration for about two months to allow them to organize their affairs.