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Third new jersey chinese restaurant partner-manager admits failing to pay taxes, fraudulently securing social security benefits for himself and his children

September 15, 2011


NEWARK, N.J. – A third partner-manager of Sawa Sushi Asian restaurants in Long Branch and Eatontown, N.J., admitted today to failing to pay taxes to the IRS and to fraudulently securing Social Security benefits, U.S. Attorney Paul J. Fishman announced.

Peter J. Wagar, 50, of Colts Neck, N.J. pleaded guilty to an Information charging him with subscribing to false personal federal income tax returns and to fraudulently securing Social Security disability and child’s insurance benefits for himself and his children while he was working at the Sawa restaurants.

On August 2, 2011, Mou Chor Tung, 45, of Colt’s Neck, and Sin Ching Chang, 35, of Long Branch,brothers-in-law and owners of the Sawa restaurants pleaded guilty to failing to pay payroll taxes to the IRS and harboring unlawful aliens.

Wagar entered his guilty plea before U.S. District Judge Claire C. Cecchi in Newark federal court.

According to documents filed in this case and statements made in court:

Wagar was an partner and manager of Sawa Sushi in Eatontown (“Sawa”) and the general manager of Sawa Sushi in Long Branch (“Sawa 2”). From September 2006 through September 2009, in his position as the general manager at Sawa 2, Wagar was paid cash and bonuses in the aggregate amount of approximately $186,317. Also, from May 2008 through October 2009, in his role as a partner and manager at Sawa 1, Wagar made a profit of approximately $100,000 from the sale of his ownership stake in the restaurant. Wagar never disclosed any of this income, totaling approximately $286,317, to the IRS, resulting in a tax loss to the United States of approximately $71,923.

In addition, Wagar failed to disclose any of the facts of his employment and income at the Sawa restaurants to the United States Social Security Administration (“SSA”), from whom he and his children had been receiving disability and child’s insurance benefits since approximately late 1997. Specifically, Wagar claimed in two 1998 applications to the SSA that he was disabled and unable to work due to visual impairments and glaucoma. Based upon Wagar’s applications, the SSA determined that Wagar was entitled to disability insurance benefits and that Wagar’s children were entitled to child’s insurance benefits. As a result, from approximately 1997 through the current date, Wagar has received a total of between approximately $2,100 and $2,800 from the SSA on a monthly basis for himself and his children. Although Wagar’s employment at the Sawa restaurants made him and his children ineligible for Social Security benefits, Wagar failed to advise the SSA of such employment, and he continued to receive monthly disability payments for himself and his children, to which he was not entitled, totaling approximately $56,960.

The tax charge to which Wagar pleaded guilty carries a maximum potential penalty of three years in prison and a $100,000 fine. The Social Security charge to which Wagar also pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Dec. 20, 2011.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff; the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent-in-Charge Andrew McLees, Newark Field Office; the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert L. Panella;, and the Social Security Administration, Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge Edward J. Ryan, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.


Defense counsel: Robert S. Bonney Jr., Esq., Freehold, NJ

Wagar, Peter Information

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