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Description: Los Angeles, California criminal law lawyer represented Defendant charged with filing false tax returns that failed to report more than $4.8 million over a five-year period.
Liang “Paul” Chen, 63, the owner of the Chino-based construction company Mass Development, Inc (MDI), who is identified in court documents as a resident of Los Angeles County, admitted in court that he filed false corporate tax returns for the years 2013 through 2016.
Defendant, the owner of an Inland Empire business, pleaded guilty to filing false tax returns that failed to report more than $4.8 million over a five-year period, resulting in his failure to pay $1.6 million in taxes due to the IRS.
Chen pleaded guilty to one count of aiding and assisting in the preparation of a false income tax return. In a plea agreement filed in federal court, Chen agreed to pay the IRS restitution of $1,642,935.
According to his plea agreement, from January 2013 through October 2017, Chen was in charge of MDI’s daily business activities and was listed as the owner of MDI on its financial documents. To conceal income, Chen deposited only a portion of the checks made payable to MDI into the company’s bank account and then cashed nearly $5 million of additional checks made payable to MDI at a bank and a local liquor store that offered check-cashing services.
In relation to MDI’s federal tax returns, Chen provided the tax return preparer with statements from MDI’s business bank account as and falsely advised the tax return preparer that all of MDI’s income had been deposited into the business bank account.
By failing to tell MDI’s return preparer that he had cashed a substantial portion of business checks made payable to MDI, Chen caused MDI to falsely report its gross receipts to the IRS. This underreporting resulted in an underpayment of federal taxes totaling $1,642,935.
Chen is scheduled to be sentenced by United States District Judge Mark C. Scarsi on December 12, at which time Chen will face a statutory maximum sentence of three years in federal prison.
IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Steven M. Arkow of the Major Frauds Section is prosecuting this case.
Outcome: Defendant pleaded guilty.