A restaurant owner pleaded guilty Thursday to felony charges and paid more than $2.3 million in restitution in connection with a tax and insurance fraud scheme.
Thomas Cheung entered his plea to one count each of filing a false sales tax return, filing a false income tax return and failing to pay payroll taxes. He is facing 16 months in state prison, with sentencing set in January, according to the California Attorney General’s Office.
Cheung’s brother pleaded guilty to similar charges in August and admitted a white-collar enhancement.
Gary Cheung is facing no less than three years in prison if he pays more than $2.96 million in restitution or nine years and four months behind bars if he fails to fully pay the amount, according to the Attorney General’s Office. He has paid just under $550,000 so far and is due back in court for sentencing next August.
The brothers — who between them owned six Sam Woo restaurants in the Los Angeles area — failed to report or under-reported sales and wages, according to the Attorney General’s Office.
The charges stemmed from an investigation by the multi-agency Tax Recovery in the Underground Economy Task Force, which was set up to combat wage theft, tax evasion and other crimes in the underground economy.
“Avoiding payment of workers’ compensation premiums hurts honest taxpayers and the state’s ability to fund public services for our communities,” state Attorney General Xavier Becerra said.