West Hartford restaurateur sentenced to 18 months in prison for tax fraud scheme totaling more than $2 million - Insurance News | InsuranceNewsNet

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January 5, 2023 Regulation News
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West Hartford restaurateur sentenced to 18 months in prison for tax fraud scheme totaling more than $2 million

Hartford Courant (CT)

A West Hartford man who owns and operates several area restaurants was sentenced to more than a year in federal prison on Wednesday for an extensive tax fraud scheme totaling more than $2 million.

William Chen, 49, appeared before U.S. District Judge Stefan R. Underhill in Bridgeport and was sentenced to 18 months in prison followed by one year of supervised release for defrauding $2,092,926 in owed taxes. He pleaded guilty to two counts of filing a false tax return in July, according to the U.S. Attorney’s office.

Chen was a part owner and operator of several restaurants, including Feng Asian Bistro in Hartford, Canton and Millbury, Massachusetts; Kaliubon Ramen in West Hartford and Wethersfield; Ginza Japanese Restaurant in Bloomfield; and Ginza Japanese Cuisine in Wethersfield.

Chen was responsible for the accounting and financial records at the restaurants, including the collection and withholding of employment taxes and signing the restaurants’ tax returns. Between 2013 and 2020, he failed to withhold, account for and pay federal income taxes, Federal Insurance Contributions Act taxes and federal unemployment taxes for multiple employees that were paid in cash, the U.S. Attorney’s office said.

Chen’s role at the restaurants also involved purchasing and using the Point-of-Sale (POS) system for restaurant orders and training staff on the use of the system.

Court records show Chen paid to activate “zapper” software, which is designed to erase transactions from the system to make fraudulent sales records, according to the U.S. Attorney’s office.

During the same seven-year time frame, Chen and other employees deleted transactions to reduce the amount of sales tax collected and reported by the POS system, in turn lowering the restaurants’ taxable income that he disclosed to his accountant, who prepared income tax returns for him and his restaurants, according to court records.

Chen was also ordered to pay a $20,000 fine. He has already paid about $600,000 in restitution, according to the U.S. Attorney’s office.

He is required to report to prison on April 5, records show.

©2023 Hartford Courant. Visit courant.com. Distributed by Tribune Content Agency, LLC.

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