If you're going to break the law, why go to the trouble of forming a Delaware LLC? Won't that draw more attention to the operation and result in double taxation? Doesn't it also mean breaking Delaware law by forming a corporation for illegal purposes? Title 8, Chapter 1 says "A corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes..."

Furthermore, he takes all these steps to avoid 15% hotel tax, but pays 30% on the LLC profits and then pays income tax when he takes earnings from the LLC?

Am I missing something here?