Calif. A.G. Bonta Cracks Down on Tax Evasion, Insurance Fraud and Wage Theft in the Restaurant Industry

LOS ANGELES, California, Feb. 23 -- California Attorney General Rob Bonta issued the following news release on Feb. 21, 2024:

California Attorney General Rob Bonta today announced that seven restaurant owners have been sentenced and ordered to pay nearly $12 million dollars in restitution to their victims. A California Department of Justice led Task Force executed 27 search warrants at multiple locations in Los Angeles County, and seven individuals were charged in separate complaints with wage theft, tax evasion, insurance fraud, and/or commercial burglary. California Department of Justice's (DOJ) Tax Recovery in the Underground Economy (TRUE) Task Force prosecuted the cases in partnership with multiple state agencies including the California Department of Tax and Fee Administration (CDTFA), Employment Development Department (EDD), Franchise Tax Board (FTB), California Department of Insurance (CDI), and the Department of Industrial Relations (DIR).

"Exploiting and stealing from the most vulnerable populations in our state is inexcusable and our office will not stand for it," said Attorney General Rob Bonta. "I want to thank all our local and federal partners for bringing justice to these victims. Today's announcement should serve as a reminder: If you break the law and engage in fraud or theft, my office will hold you accountable."

"Tax evasion directly impacts Californians by jeopardizing the revenue crucial to sustaining essential services and programs," said California Department of Tax and Fee Administration Director Nick Maduros. "We stand united with law enforcement and our fellow state departments to root out fraud."

"Partnering with our fellow state agencies allows us to leverage resources to identify and stop those who choose to operate in the underground economy and contribute to California's tax gap," said FTB spokesperson Daniel Tahara.

"The EDD is committed to collaborating with its partners to fight illegal activity in the underground economy, which harms compliant businesses and California workers alike," said EDD Director Nancy Farias. "Our investigators will continue to work alongside our law enforcement partners to bring offenders to justice."

The details on the cases are as follows:

* Xu Dong, the owner of Asia Buffet and Americana Buffet and Grill, pleaded guilty to wage theft, sales tax evasion, income tax evasion, payroll tax evasion, and insurance fraud. He paid more than $3.94 million restitution and was sentenced to 32 months in prison.

* Yan Zheng, the owner of China Great Buffet, pleaded guilty to sales evasion, income tax evasion, payroll tax evasion, and insurance fraud. She paid more than $2.81 million restitution and was sentenced to 24 months in prison.

* Jiahan Zheng, the owner of Tropical Buffet and Grill, pleaded guilty to sales tax evasion, income tax fraud evasion, and payroll tax fraud evasion. He paid $599,508 restitution and was sentenced to one year probation and ordered to complete 60 days of community service

* Elva Chen, Ya Lu, and Yituan Chen owned and operated Gold Hibachi Buffet. Elva Chen pleaded guilty to sales tax evasion, income tax evasion, payroll tax evasion and insurance fraud. She paid over $1.67 million in restitution and was sentenced to 32 months in prison. Defendant Ya Lu pleaded guilty to grand theft and commercial burglary. She paid nearly $1.7 million restitution and was sentenced to 32 in prison. Defendant Yituan Chen pleaded guilty to sales tax evasion. He paid $428,226 restitution, and was sentenced to two years formal probation and ordered to serve 364 days in prison.

* Jian Zhang, the owner of Kami Buffet and Grill, pleaded guilty to sales tax evasion and income tax evasion. He paid $785,177 restitution and was sentenced to 32 months in prison.

The sentences were the result of an investigation by DOJ, CDTFA, EDD, FTB, CDI and DIR. DOJ, CDTFA, FTB and EDD are a part of the (TRUE) Task Force. The TRUE Task Force was created to ensure multiagency collaboration and to combat wage theft, tax evasion, and other crimes in the underground economy. The task force consists of attorneys, investigators, and special agents from the member agencies.

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Original text here: https://oag.ca.gov/news/press-releases/attorney-general-bonta-cracks-down-tax-evasion-insurance-fraud-and-wage-theft