A Beverly Hills businessman has pleaded guilty to a scheme that defrauded the federal and state governments out of about $1.2 million in taxes.

Haim Jerry Kohen, owner and operator of a business that “bought and sold bulk quantities of used clothing,” for more than a decade either did not report or underreported his income on his tax returns, the U.S. Department of Justice said in a news release.

“He attempted to conceal this income from the IRS by diverting it from his business to himself and by dealing in cash,” the release said.

In one case, he received cash from “a significant customer,” kept that cash and did not deposit it into his business account. He then did not report the cash as income for either his business or himself.

That same customer also agreed to repay Kohen’s business nearly $650,000, though “Kohen and the customer executed a promissory note where the customer agreed to repay the debt to Kohen personally, and not to his business,” the release said.

The payments were made in cash that Kohen kept and did not report as income.

Kohen also did not declare interest he received on money he’d loaned out and income on rental properties in Beverly Hills and Tarzana, prosecutors said.

Kohen’s ploys kept nearly $1.2 million from the state and federal government.

When he’s sentenced in October, he could receive up to five years in prison, a period of supervised release, and restitution and monetary penalties.

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