Two restaurant owners in the west metro have been given 90-day terms for purposely underreporting sales in a long-running tax fraud scheme and cheating the state out of nearly $240,000.
Two west-metro restaurant owners given 90-day sentences for scheme that cheated state out of nearly $240K
They were sentenced to the workhouse but may serve time on electronic home monitoring if the court finds them eligible.
April 18, 2023 at 8:41PM
Su "Audrey" Qian, 45, and Xu Sheng "Jacky" Wang, 47, both of Plymouth, each pleaded guilty last week in Hennepin County District Court to one felony tax fraud count in connection with the scheme they perpetuated from Raku Sushi & Lounge in the West End retail district in St. Louis Park and Raku in Edina's 50th and France shopping district.
They were sentenced to the workhouse but possibly may serve their time on electronic home monitoring if the court finds them eligible.
Both also were ordered to share in paying $63,000 in restitution. In addition, Qian was directed by Judge Michael Burns in a post-sentencing order to "cooperate with the Minnesota Department of Revenue in the determination and payment of any additional back taxes owed."
The state Department of Revenue's two-year investigation resulted in Qian being charged by the Hennepin County Attorney's Office with 16 counts of tax fraud and Wang with 14 counts. All but one count against each defendant were dismissed as part of a plea agreement. As a business, the restaurant was and remains charged with 14 counts of failure to pay or collect sales taxes.
According to prosecutors:
Investigators examined daily sales reports for the St. Louis Park restaurant that had been provided to auditors for January 2016 through May 2017. They obtained and reviewed bank records for the restaurants showing no cash deposits into the checking accounts, but there were withdrawals including about $566,000 in 2016 and $500,000 in 2017. Most of the withdrawals were made by Qian and Wang.
On July 17, 2018, law enforcement searched the homes of Wang and Qian and the two restaurants. In Qian's purse, investigators found two USB drives that contained a program called Happy World.exe, which can be used to delete and alter sales records. Investigators seized daily sales reports for both restaurants as well as a notebook that had "Happy World" written on one page followed by instructions to delete selected orders and rearrange order numbers.
Investigators compared the records found in Qian's home and restaurants to records provided to the department during an audit. They found discrepancies between the two sets of financial records.
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