A Brookville, New York, man pleaded guilty today to willfully neglecting to collect and pay over employment taxes to the IRS on behalf of the spa businesses he owned and managed.
According to court records and testimony produced in court, Sung Soo Chon, 63, also known as Steve Chon, served as the CEO, president, and majority owner of Spa Castle Queens in College Point, New York, and Spa Castle Texas in Carrolton, Texas.
Chon oversaw the day-to-day operations of the two spas and related businesses. He also instructed subordinates to pay some workers in cash, many of whom were not legally allowed to work in the United States.
Chon neglected to withhold from the earnings of selected spa employees all of the legally required federal payroll taxes, in addition to filing false employment tax returns with the IRS between the first quarter of 2014 and the first quarter of 2017.
During this time, Chon compelled the businesses to hide more than $1.3 million in financial compensation. The spa companies owe $199,238 in payroll taxes to the IRS, but they haven’t paid them.
Chon is scheduled to get his penalty on December 6. In addition to restitution, financial fines, and a period of supervised release, he could receive a sentence of up to five years in jail.
A federal district court judge will consider the U.S. Sentencing Guidelines as well as other legal factors when deciding on any punishment.
Breon Peace, US Attorney for the Eastern District of New York, and Stuart M. Goldberg, Acting Deputy Assistant Attorney General, both work for the Justice Department’s Tax Division.
The IRS-Criminal Investigation is looking into the incident.
Trial Attorney Ann M. Cherry of the Tax Division and Assistant Chief Jorge Almonte are prosecuting the case.
On behalf of the spa companies he owned and ran, a Brookville, New York, the man pled guilty today to deliberately failing to collect and pay over employment taxes to the IRS.
Sung Soo Chon, 63, also known as Steve Chon, was the CEO, president, and majority owner of Spa Castle Queens in College Point, New York, and Spa Castle Texas in Carrolton, Texas, according to court documents and testimony presented in court.
The daily operations of the two spas and associated enterprises were under Chon’s supervision. Additionally, he gave orders for some employees—many of whom were not authorised to work in the country—to be paid in cash.
Between the first quarter of 2014 and the first quarter of 2017, Chon failed to deduct the legally required federal payroll taxes from the wages of a select group of spa employees and filed false employment tax filings with the IRS.
Chon forced the companies to conceal more than $1.3 million in remuneration during this time. The spa businesses owe the IRS payroll taxes totalling $199,238 but haven’t paid them.
On December 6, Chon is expected to get his punishment. He might be given a term of up to five years in prison, along with restitution, financial penalties, and a period of supervised release.
The U.S. Sentencing Guidelines and other legal considerations will be taken into account by a federal district court judge when determining any punishment.
The Tax Division of the Justice Department is where Breon Peace, US Attorney for the Eastern District of New York, and Stuart M. Goldberg, Acting Deputy Assistant Attorney General, both work.
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The event is being investigated by the IRS-Criminal Investigation.
The case is being prosecuted by Trial Attorney Ann M. Cherry of the Tax Division and Assistant Chief Jorge Almonte.
