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Update: Four hours after publication of this piece, Mayor Daniel Lurie announced that Beya Alcaraz had resigned as supervisor.
In a series of text messages obtained by Mission Local, Mayor Daniel Lurie’s new pick to lead District 4, Beya Alcaraz, wrote that she paid some of her former pet shop workers “under the table,” apparently misreporting her business expenditures and skimping on paying taxes by doing so.
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She texted that her taxes “will be less, since I pay people under the table now…” and estimated that her business held perhaps $75,000 in cash “on top of the reported revenue.”
Alcaraz also wrote of writing off dinners and drinks with friends or “clients” as a business expense, and then sometimes receiving cash back from her companions.
Mission Local verified that the messages are from Alcaraz’s cell number.
Accounting professionals said that while business owners cutting corners and writing off personal expenses is common, the potential tax-dodging is more serious.
Jerry Dratler, a retired accountant and the former chief accounting officer of Williams Sonoma, said that behavior of this sort is “pretty prevalent” in this and every city, among businesses small, medium and large. He said the practice of overstating business expenses by paying for non-work events — and then being remunerated in cash — was “a foot fault.”
But he saw Alcaraz’s texts as tantamount to an admission that she filed false tax returns — “and that’s pretty damn serious. That goes beyond being a sloppy business operator.”
Lurie on Friday tapped Alcaraz for the District 4 seat left vacant for 20 days after the departure of recalled former supervisor Joel Engardio. The March 28 text messages further cloud the appointment of Alcaraz, a 29-year-old with no experience in government or serious involvement in community service. It also raises more questions about the vetting and decision-making process by Lurie to select Alcaraz.
In a statement, Alcaraz said, “I don’t owe a dollar in taxes, and I paid the young people who came to work in my store because I believe in my core that young people in my community and every community deserve to be paid for their work. I worked seven days a week to keep my business open through the pandemic and always ensure that my employees were paid, and I’m going to use that experience every day as I work to make life easier for small businesses and families in the Sunset.”
A statement from the mayor’s office read “Supervisor Alcaraz knows how hard it is to run a small business in San Francisco. She’s going to bring the same grit and determination she brought to her business to her new role advocating for families and small businesses in the Sunset.”
The mayor’s office did not answer questions regarding if it knew about Alcaraz’s alleged business practices, or condoned them.
Lurie has rejected the notion that his nomination was a misguided or cavalier endeavor. Alcaraz was “absolutely” vetted,” he told a gaggle of reporters including Channel 7’s Monica Madden. “She can’t help that she’s 29 years old.”
The March 28 text message exchange was between Alcaraz and Julia Baran, who took over Alcaraz’s pet store, the Animal Connection, from Alcaraz in May.
Baran’s experience taking over Animal Connection from Alcaraz was also the crux of a story published by the San Francisco Standard on Nov. 10 — Baran shared documents showing that Animal Connection “was in the red by tens of thousands of dollars” between 2020 and 2023. Baran also spoke of and shared videos depicting Animal Connection as beset with rodent infestations, a foul odor, “squalor” and a stash of dead pets sitting in the freezer.
When the prospective buyer Baran asked Alcaraz about work schedules for pet shop staffers, Alcaraz noted that “my under the tables come in as needed. And then I have another under the table seasonal hire when the boarding gets busy!”
In the text exchange, Alcaraz said she estimated there was an additional $50,000 to $75,000 in cash on top of the reported revenue in the business’ ledger. Baran replied “Between the two under the table you’re paying them about $30K a year, so I figured it was at least that.”
While the business listed expenses of $35,000 for taxes and licenses, Alcaraz texted “It will be less, since I pay people under the table now, but that’s payroll taxes and sales tax mostly.”
Dratler noted that it is “not illegal per se” to keep messy books. “But if you use that information to file your tax return?” That, he says, is different.
Sharky Laguana, the former president of the small business commission, said that the behavior described in the text messages is unambiguously illegal. But he said he still has sympathy for Alcaraz and all small business owners.
“The law requires employers to collect and remit taxes for payroll and withhold workers’ taxes. There is no dispute that is what the law requires,” he said. “With that said, there are a lot of cases where the ability to get paid under the table helps people who are on the edge of poverty. It helps people who are immigrants.”
On top of paying workers under the table, Alcaraz wrote in the texts that “I also live off a big portion of the non cash revenue. I spend expense [sic] a bit of money on my personal life so I can use it as a tax deduction. E.g. I pay for my dinner and drinks with my friends or ‘clients’ as a business expense and then they may or may not pay me back in cash. When you see meals and entertainment, office meals, travel, etc that’s usually what that’s for.”
Baran is 26 and, like Alcaraz, a city native. She said she is not paying workers under the table or writing off nights out as business expenses. Following publication of the Standard article on Friday, she was contacted by the mayor’s office. After she shared several photos and videos of wretched conditions in the pet shop, a mayoral aide texted “Are there specific actions you’re hoping we can do to remedy the situation?”
Baran tells Mission Local that there are: “They should own up to what they did, apologize and promise to do better.”
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Managing Editor/Columnist. Joe was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left.
“Your humble narrator” was a writer and columnist for SF Weekly from 2007 to 2015, and a senior editor at San Francisco Magazine from 2015 to 2017. You may also have read his work in the Guardian (U.S. and U.K.); San Francisco Public Press; San Francisco Chronicle; San Francisco Examiner; Dallas Morning News; and elsewhere.
He resides in the Excelsior with his wife and three (!) kids, 4.3 miles from his birthplace and 5,474 from hers.
The Northern California branch of the Society of Professional Journalists named Eskenazi the 2019 Journalist of the Year.
18 Comments
Omg this is some funny funny shi*t. I hate Daniel Lurie’s oligarch-focused politics but I didn’t expect him to be so bad at strategy. Just wow. He couldn’t be a worse mayor for this moment.
“In a statement, [recently appointed Supervisor Beya] Alcaraz said, “I don’t owe a dollar in taxes, and I paid the young people who came to work in my store because I believe in my core that young people in my community and every community deserve to be paid for their work.” But Alcarez also texts, “I pay people under the table now, but that’s payroll taxes and sales tax mostly.”
It’s illegal, unethical, outrageous for Alcarez to encourage workers to forgo their legal responsibilities and rights to line her own pockets.
Paying employees “under the table” cheats them of Social Security credits, worker’s compensation, and unemployment benefits, taking advantage of young workers who might not understand the need for those benefits until they find themselves short of Social Security credits for disability benefits, injured on the job with no right to claim medical care and lost wages, or laid off with no right to unemployment funds.
Sad state of affairs when the political novice of a mayor kicks out experienced people ready to speak truth to power (max carter-oberstone) and appoints box checking yes women (this one and the police commissioner who knows nothing about policy or law)…
Come to think of it who does that remind me of? 🤔Oh yeah the guy who appointed unqualified Fox News hosts to cabinet positions because they “look the part” and will be loyal to him.
How much did Lurie know before he “tapped” Alcaraz?
I pay all of my taxes and I’m really tired of politicians who don’t. We don’t need more corrupt people running the city who cheat and are cool with fraud. She needs to be investigated by the IRS and Lurie should find someone else who isn’t corrupt on DAY 1. Geesh.
What is the deal with this woman? what is the deal with her selection ? what is wrong with Lurie? she obviously has no qualifications at all and if the texts are really from her, she should be prosecuted, she is not qualified and probably should send her resume to Mar A Lago or the White House since they hired only the best..”Be Best”!! or asked for a pardon since she has all the requirements to be pardoned.
I can’t get over how bad this pick is. If I lived in the Sunset, I’d be furious.
On the nose I’m getting decomposed rodents and emerging nuances of incompetent loyalist.
Speaking of aromas what’s going on with Dan’s face in the grocery store photo? Not a lot of Chinese food in Malibu I guess… or maybe he just scented his appointee?
Reminder to everyone who doesn’t follow the law 100%, stay off the gosh darn phone for goodness sake.
What a perfect selection for District 4. She will fit in perfectly with the Ed Lee-London Breed-Daniel Lurie corruption syndicate.
What’s the problem? A grifter like her, will fit in perfectly with the city ‘family’. She operates like they do, already. No training needed.
There are plenty of small business owners who follow the laws.
I am a fan of the mayor but this appointment was a joke from the get-go and he deserves the egg on his face that he has now. What a fiasco
Anyone remember Harriet Miers? Alcatraz should follow her lead and let someone qualified take this seat.
Damning.
Joe,
I read one take that Lurie appointed Alcaraz as a bit of an F-U to the Chinese population who were strongly against Engardio. Any thoughts?
Getting paid under the table also helps all the people on some sort of social security who can’t show too much income at the risk of losing benefits. (Repeating for all the other means tested social programs like affordable housing.) Remember the dog walker without a bank account?
that was a very short amount of time for corruption to rear its ugly head.
Sure glad we recalled Engardio. ;P
Huge improvement for our district, clearly. Absolutely worth a costly off-cycle recall election.
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