U.S. DEPARTMENT OF JUSTICEU.S. DEPARTMENT OF JUSTICE
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United States Attorney’s Office
Northern District of California
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11th Floor, Federal Building
450 Golden Gate Avenue, Box 36055
San Francisco, California 94102
(415) 436-7200
FAX: (415) 436-7234
FOR IMMEDIATE RELEASE
February 1, 2006
HUSBAND AND WIFE SENTENCED FOR FALSIFYING TAX RETURNS
Defendant wife Sentenced to 28 Months and Ordered to Pay $271,111 in Restitution
Defendant husband Sentenced to 16 Months and Ordered to Pay $76,163 in Restitution
SAN FRANCISCO – United States Attorney Kevin V. Ryan announced that Hong Van Phan and Khanh Dieu Hoang, husband and wife, residents of Milpitas, California, were sentenced yesterday for falsifying their federal income tax returns between 1999 and 2002. Mrs. Hoang was sentenced to 28 months in prison and ordered to pay $271,111 in restitution and a $7,500 fine. Mr. Phan was sentenced to 16 months in prison and ordered to pay $76,163.07 in restitution and a $7,500 fine. The defendants delivered to the government a check for $2,816,788.43 just minutes before sentencing as partial payment for their unpaid taxes, penalties, and interest. This prosecution is the result of an investigation by the IRS.
Defendant Phan worked for Lucent Technologies and its predecessor company Ascent Communication from 1996 until 2003. Phan invented a testing device which he then sold to Lucent. However, since his employment contract with Lucent prohibited such sales, Phan and his wife created a company to manufacture and sell the product to Lucent, without Lucent knowing of his involvement. The defendant received approximately $8,000,000 in sales revenue which they did not report on their 1998-2002 tax returns, resulting in unpaid tax of approximately $3,300,000, excluding interest and penalties.
Mrs. Hoang and Mr. Phan pleaded guilty on September 28, 2005, to four counts and one count, respectively, of filing false tax returns in violation of 26 U.S.C. § 7206(1). There was no plea agreement with Mrs. Hoang, who admitted in court to preparing their joint tax returns for the years 1999 through 2002 and failing to report approximately $8 million of income they earned from a business they owned and operated. According to the plea agreement with Mr. Phan, he admitted to being aware of his wife’s failure to report approximately $200,000 of income from their business on their 2002 tax return.
The sentences were handed down by U.S. District Court Judge William H. Alsup. Mrs. Hoang will begin serving her sentence on March 27, 2006, and Mr. Phan will begin serving his sentence upon the completion of Mrs. Hoang’s sentence.
Jeff Finigan and Jay R. Weill are the Assistant U.S. Attorneys who prosecuted the case. The prosecution is the result of a two year investigation by Special Agents of the Internal Revenue Service.
According to Roger L. Wirth, IRS Special Agent in Charge: "What we see here is another example of the dangerous consequences of tax fraud. People who evade their tax obligations should expect to face federal criminal prosecution and possible imprisonment."
Further Information:
Case #: 05-00209 WHA.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.
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