President Of Oakland Roofing Company Sentenced To Prison For Tax Evasion Scheme
OAKLAND, Calif. – The president of Westco Roofing Inc. was sentenced yesterday to two years in prison, and ordered to pay $367,656 in restitution for conspiracy to defraud the United States of tax revenue, United States Attorney Melinda Haag and Internal Revenue Service Criminal Investigation (IRS-CI) Special Agent in Charge Marcus Williams, announced .
In an indictment filed on April 29, 2010, Tae Son Lee, a/k/a Mike Lee, 52, was charged with one count of conspiracy, 31counts of structuring financial transactions to avoid IRS reporting requirements and 18 counts of tax evasion. Lee pleaded guilty on April 4, 2012, to the conspiracy charge.
According to the plea agreement, and evidence presented in court at sentencing, Lee was the sole shareholder and corporate officer of Oakland based Westco Roofing Company Inc. Lee established a series of shell companies to defraud the United States, for tax years 2003 through 2008, by impeding the IRS in its assessment and collection of Social Security and Medicare taxes (FICA). To accomplish his scheme, Lee made “subcontractor” payments to conspiracy-controlled shell companies that had no real employees and performed no real work. Cash was withdrawn from the shell companies’ bank accounts and Westco employees received cash wages. Westco failed to report, withhold and pay the FICA taxes on these cash wages. Lee admitted that the scheme resulted in at least $367,656 in tax losses.
Lee's sentence was handed down by U.S. District Court Judge Phyllis J. Hamilton following a guilty plea on a charge of conspiring to defraud the United States in violation of 18 U.S.C. § 371. Judge Hamilton also sentenced Lee to a three-year period of supervised release and ordered that he comply and cooperate with the IRS in a good faith effort to pay any outstanding tax liability, to include any assessed interest and penalties. Lee is scheduled to begin serving the sentence on Nov. 5, 2012.
Andrew S. Huang is the Assistant U.S. Attorney who is prosecuting the case with the assistance legal assistants Vanessa Vargas and Jeanne Carstensen, and paralegal Noble Hughes. Trial Attorney Christopher Strauss of the United States Department of Justice Tax Division also assisted in the investigation and prosecution of this case. The prosecution is the result of a six-year investigation by the IRS-CI.