Sam Woo Restaurant Chain Owner Guilty for Evading Over $2.4 Million in Taxes

August 20, 2020

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.

Feature Image via Tim C.

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