Bobbie Ephrem, a 53-year-old auto dealer, fell under suspicion in March 2006, when a police informant told IRS agents that Ephrem concealed huge amounts of cash, failed to pay taxes and often used his son's Social Security number, court records show.
The informant told the IRS that Ephrem's retail auto sales business in Northeast Portland raked in $50,000 a month and that a wholesale auto business had brought in $355,000 during a four-day auction in Spokane.
In August 2006, IRS agents carried a search warrant to Ephrem's house and asked about cash and valuables. Ephrem told them he had nothing of consequence in the home, other than perhaps his Rolex watch, the government alleges.
But in less than seven hours, agents turned up $366,768.50 in currency and the keys to safe-deposit boxes. The next day, agents seized $2.3 million more from safe-deposit boxes at three Portland area banks, bringing total cash seizures to $2.7 million.
The IRS issued Ephrem a rare "tax jeopardy assessment," accusing him of not filing income taxes for nine years and calculating that he owed taxes, penalties and interest of $8.5 million.
Ephrem hired prominent Portland lawyer Marc Blackman and sued the government. His complaint accused the IRS of stealing his family fortune, which included more than $1 million of "sacred" inheritance money that belonged to him, his three brothers and a nephew.