| FOR IMMEDIATE RELEASE June 18, 2009 WWW.USDOJ.GOV/USAO/CAN |
SAN JOSE, Calif. – A Palo Alto, Calif., real estate developer pleaded guilty Monday to one count of aiding or assisting in causing a false return to be filed, announced United States Attorney Joseph P. Russoniello and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant.
In pleading guilty, Yu-Fen Huang admitted that she and her husband owned and operated a real estate development company called Wellswood Development, Inc. Wellswood builds and sells custom residential homes in Palo Alto, Los Gatos and Cupertino, Calif. In 2000, Huang and her husband established a private operating foundation called J&V 2000 Foundation. J&V was created to be a charitable organization which promotes education among children in third-world countries. Huang and her husband contributed all of the funding for J&V by donating full and partial ownership of two residential homes they built shortly before the foundation was established. They subsequently declared on their tax returns the value of their donation to J&V to be approximately $2.8 million.
Huang and her husband appointed a close family friend as the trustee of J&V and appointed themselves as executives of the foundation and paid themselves a salary from the foundation’s funds.
For the years 2003, 2004 and 2005, Huang was involved in what she understood to be self-dealing transactions under the Internal Revenue Code. In July 2002, she arranged for her father to enter into a 30-month vehicle lease agreement on behalf of J&V with her stepmother in Taiwan. J&V paid $18,740 for the car lease. In October 2002, she arranged for J&V to enter into a 38-month lease agreement with her stepmother to lease office space from her for J&V’s Taiwan branch office, even though the office was actually a three-bedroom condo that Huang owned. J&V paid $89,062 for the lease of this condo. As the payments were going to Huang’s father, a manager of J&V Foundation, the agreements for both the car and condo were self-dealing transactions.
Huang, of Palo Alto, was charged on June 3 with one count of aiding or assisting preparation of a false return in violation of Title 26 U.S.C. § 7206(2).
Huang is scheduled to be sentenced on September 21 before Judge James Ware in San Jose. The maximum statutory penalty for each count of filing a false tax return in violation of Title 26 U.S.C. § 7206(2) is three years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas Moore is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by the Internal Revenue Service Criminal Investigation.
Further Information:
Case: CR-09-0572 JW
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