Ocean City Restaurant Operators Plead Guilty in Scheme to Employ and Harbor Illegal Aliens
Employees Paid Below Legal Wages in Cash
Baltimore, Maryland - Husband and wife Bo Hao Zhu, age 33 and Siu Ping Cheng, age 30, of Ocean City, Maryland, pleaded guilty today to evading taxes and unlawfully employing aliens, respectively, in connection with their employment of illegal aliens at two Ocean City restaurants, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Zhu & Partners, LLC pleaded guilty to alien harboring and inducing aliens to reside in the United States.
According to their plea agreements, Bo Hao Zhu owned and operated the Miyako Sushi and Seafood Buffet (Miyako) and Panda China Buffet (Panda Buffet) restaurants in Ocean City, Maryland. In September 2004, Zhu & Partners, LLC purchased 12902 Ocean Gateway Highway, where Miyako is located, for $2,300,000. Panda Buffet is located at 12641 Ocean Gateway Highway.
In February 2005, a bank employee observed Siu Ping Cheng depositing large amounts of cash into Panda Buffet’s accounts. Over several months, ICE agents also observed several individuals, believed to be illegal immigrants, traveling in Bo Hao Zhu’s vehicle from Panda Buffet, where they worked, to Zhu and Cheng’s condominium. A review of immigration records in June 2006 revealed that six of 11 occupants of the condominium who were employees of Panda Buffet were in the country illegally. In June 2007, agents established that four of eight employees working at both restaurants were in the country illegally. Zhu and Cheng had knowingly hired these illegal aliens and paid them in cash for less wages than the law required. From 2005 to 2007, Zhu & Partners, LLC concealed numerous illegal aliens from detection in residences and businesses it owned and rented.
During 2007, Zhu paid wages to employees of his restaurants, resulting in employment taxes owed to the government of $6,798.10. Zhu failed to pay these employment taxes and provided false information to the IRS concerning wages paid to his employees.
“Employers who do not withhold employment taxes are victimizing legitimate businesses by creating an unfair competitive advantage over those businesses that lawfully pay their share of employment taxes,”said IRS Special Agent In Charge C. Andre' Martin.
Zhu & Partners, LLC faces a fine of $250,000, or twice the gross gain or loss caused by its conduct, together with costs of prosecution. Zhu faces a maximum sentence of five years in prison for employment tax evasion and a fine of $250,000, or twice the gross gain or loss caused by his conduct, together with costs of prosecution. Cheng faces a maximum sentence of six months in prison for unlawful employment of illegal aliens and a fine of $3,000 for each unauthorized alien with respect to whom such a violation occurs. As part of their plea agreement, all of the defendants have agreed to forfeit their interests in the Miyako property at 12902 Ocean Gateway Highway. U.S. District Judge Andre M. Davis indicated that the sentencing hearing will be held in September 2008, but no specific date has been set.
United States Attorney Rod J. Rosenstein thanked U.S. Immigration and Customs Enforcement, the Maryland Department of Natural Resources Police, the Ocean City Police Department and the Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorney Steven H. Levin, who is prosecuting the case.