A Los Angeles County-based restaurateur is set to serve at least three years in prison over tax evasion and insurance fraud charges.
The charges: Gary Cheung, owner of the popular Hong Kong-style restaurant chain Sam Woo, faced a total of 107 charges and pleaded guilty to filing a false sales tax return, failure to pay payroll taxes and filing a false income tax return, among others.
- Cheung was accused of using his restaurants to run a fraudulent tax and workers’ compensation insurance scheme from January 2012 to March 2019.
- Members of the Tax Recovery in the Underground Economy task force completed the investigation into Cheung’s fraudulent schemes.
- During the period, he failed to report the following information:
- Over $16 million in sales to the Department of Tax and Fee Administration
- Over $14 million in taxable income to the Franchise Tax Board
- Over $2.1 million in wages to the Employment Development Department
- Over $2.1 million in wages to insurance carriers.
- The press release from Attorney General Xavier Becerra’s office also revealed that Cheung evaded payment of $2,414,769.93 in sales tax, income tax, and payroll tax, and $549,606 in workers’ compensation insurance premiums.
- The restaurant chain owner will be formally sentenced in August 2021.
- Should Cheung pay $2,964,375.93 in restitution, he will serve at least three years in prison or nine years and four months should he fail to pay the amount required.
Cheung’s chain: The original Sam Woo Restaurant opened over 40 years ago in LA’s Chinatown and has gained its popularity for its Hong Kong-style barbecued ducks and pigs. It has since expanded to multiple outlets across the county and beyond.