A La Habra man, who owns the Ostioneria Colima seafood chain in Orange and Los Angeles counties, pleaded guilty Thursday to obstructing a federal investigation into him failing to pay his employees minimum wages and overtime.
Victor Hugo Guzman, 49, was charged with obstruction of a federal investigation and filing a false tax return, according to Ciaran McEvoy, a public information officer for the U.S. Attorney’s Office for the Central District of California. He admitted to both crimes.
Guzman admitted in a Santa Ana federal courtroom that between 2011 and 2014, he paid some employees, who worked 12 hours a day, six days a week, a flat weekly salary of $320 a week, which comes out to $4.44 per hour. California’s minimum wage at the time was $8 an hour.
Guzman then obstructed the U.S. Department of Labor’s investigation by instructing his employees to lie to federal investigators about the number of hours they worked. Guzman also hired someone to fabricate his records, McEvoy said.
Guzman submitted fabricated time cards to the Department of Labor, which showed employees working a maximum of 40 hours a week, when in fact the same employees were working between 60 and 72 hours a week.
Guzman also admitted to filing false payroll tax returns for several years, which underreported the amount of wages he paid his employees and allowed him to underpay federal payroll taxes, McEvoy said. He has agreed to pay back the taxes and more than $200,000 in wages to his employees.
Guzman is scheduled to be sentenced on April 23 and he faces a statutory maximum sentence of eight years in federal prison, according to McEvoy.
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