In March of 2012, Michael Chen, owner of Fune Ya Japanese Restaurant in San Francisco was convicted in federal court on charges of mail fraud and filing false federal corporate income tax returns. News reports claim that Chen retained daily customer receipts for the business in boxes labeled “seasoned octopus.”
Federal prosecutors claimed that Chen kept the detailed records of the restaurant’s daily proceeds in the labeled boxes in a crawl space underneath the floor of the restaurant. Allegedly, cash sales indicated on the receipts were not reported to the Internal Revenue Service; additionally, news report state that while Chen reported approximately $65,700 in sales to the IRS and $450,000 to the California Board of Equalization, Excel spreadsheets (which were encrypted) revealed that Chen actually had $1.9 million in sales over the time period. Prosecutors alleged that in order to avoid detection, Chen paid employees in cash.
On Wednesday January 30 Chen was ordered by U.S. District Judge Maxine Chesney to pay $459,000 in back taxes; he was sentenced to a federal prison term of two years and nine months as well.
Chen had opened Fune Ya Japanese Restaurant, located in the Richmond District, in 2004. News reports indicate that the charges filed against Chen stemmed from the three-year period after he initially opened the restaurant.
San Francisco fraud attorneys know that individuals who fail to file federal taxes or who fail to report the proper amount of income face serious consequences if convicted. Tax fraud and evading taxes can result in substantial jail/prison time, steep fines, restitution and in some cases asset forfeiture.
Individuals who are under investigation or who have been charged with tax evasion, wire fraud, embezzlement or other financial crimes must speak with a skilled San Francisco criminal defense lawyer at once. Your attorney will work to protect your legal rights and freedom, and to determine the most effective legal approach to obtain the most positive results.
